Bristol-Myers Squibb and a subsidiary have agreed to pay more than $515 million to settle civil suits over fraudulent drug marketing and pricing schemes, including illegally promoting an anti-psychotic drug to children and the elderly, US Attorney Michael J. Sullivan said yesterday.
The settlement between the federal government and Bristol-Myers Squibb and Apothecon Inc. is the third-largest between a pharmaceutical company and the US Attorney's Office in Massachusetts....
The company said it has ... entered into a five-year 'corporate integrity agreement' with the Office of the Inspector General of the Department of Health and Human Services that requires it to develop programs to ensure compliance with the law.
The most notable charges involved unethical marketing practices.
The agreement says Bristol-Myers Squibb gave kickbacks to physicians and healthcare providers from 2000 through mid-2003 to get them to prescribe the company's drugs. The kickbacks came in several forms, including consulting fees and trips to luxury resorts.
From 2002 through 2005, Bristol-Myers Squibb promoted the sale of Abilify, an anti-psychotic drug, for pediatric use and to treat dementia-related psychosis, both "off-label" uses, prosecutors said. The Food and Drug Administration has approved Abilify to treat adult schizophrenia and bipolar disorder but not for the uses marketed by Bristol-Myers Squibb.
Nonetheless, Bristol-Myers Squibb created a special longterm-care sales force that called on nursing homes and promoted off-label use of Abilify, prosecutors said.
A sales force also visited child psychiatrists and other pediatric specialists and urged them to prescribe Abilify.
There were also allegations of pricing hanky-panky.
Bristol-Myers Squibb participated in pricing schemes, including one involving its anti-depressant drug Serzone, that defrauded the Medicaid program, prosecutors said.
Bristol-Myers Squibb and Apothecon also inflated prices for a wide assortment of cancer-fighting and generic drugs, deceiving federal healthcare programs that established reimbursement rates based on those prices, prosecutors said.
Not surprisingly, the company wants to put it all behind it.
Bristol-Myers Squibb is pleased to have resolved these matters from the past and is proud of its commitment to conduct business with the highest standards of integrity in its mission to extend and enhance human life.
Critics of the industry were not impressed.
Dr. Jerome Kassirer, a professor at Tufts University School of Medicine and outspoken critic of drug companies, is skeptical.
'A lot of these companies, when they get sued for a few million dollars, they just consider it loose change,' he said. 'I haven't seen any let-up in what they're doing. Most of the time, when they're caught, they'll often say, 'It was a renegade, someone who wasn't following the instructions. Our policy says we shouldn't do that.' '
Similarly, Thomas M. Greene, a Boston lawyer representing one of the whistleblowers, said the allegations are serious because off-label use has the potential to harm patients.
'What happens when you promote a drug that is not effective?' he said. 'You're depriving sick people of some other effective treatment.'
As in the recent case involving orthopedic device manufacturers, (see post here), so far, despite the huge corporate fine, it is not clear that any individuals, either at the drug company, or physicians, will pay a penalty.
As we noted before, corporate payments of huge fines may not be much of a negative incentive to corporate executives because the impact of the fines can be spread across the entire organization. And such fines clearly have no direct effect on physicians, and will not discourage them from accepting "consulting fees and trips to luxury resorts" on behalf of drug marketers.
How many more examples like this do we as a society need before we conclude that there is a systemic problem with unethical behavior by leaders of health care organizations, and that we need a systemic solution to this problem that goes past civil lawsuits, corporate compliance monitoring, and deferred prosecution agreements?
ADDENDUM - See also comments on BrandweekNRX, and on the Wall Street Journal Health Blog.