Oregon Department of Justice

Attorney General Hardy Myers today announced that the Oregon Department of Justice (DOJ) Medicaid Fraud Control Unit has finalized a landmark settlement with Bristol-Meyers Squibb (BMS) and its former wholly owned subsidiary Apothecon, Inc., resolving allegations of illegal pharmaceutical marketing and pricing. Oregon was joined by 43 states, the District of Columbia and the federal government.

As a result of the settlement, BMS paid $389 million in Medicaid restitution, penalties and interest, which was allocated based on states' payments for the products at issue. Oregon received over $3 million for its Medicaid program.

"This case is part of a continuing effort by DOJ to pursue fraud in the pricing of pharmaceutical products purchased by the Oregon Medicaid Program," Myers said. "Over the last five years, our Medicaid Fraud unit has returned more than $12 million in damages, penalties and interest to Oregon's Medicaid program."

The settlement addresses allegations that BMS engaged in a number of improper marketing and pricing practices for pharmaceutical products that impacted the Oregon Medicaid Program, including:

• Reporting inflated prices for various prescription drugs knowing that Medicaid and various federal health care programs would use those numbers to pay for BMS and Apothecon products used by their recipients;
• Illegally compensating physicians, health care providers and pharmacies to induce them to purchase BMS and Apothecon products for Medicaid patients;
• Promoting the sale of Abilify, an antipsychotic drug, for pediatric use and for treatment of dementia-related psychosis, uses for the product that are not approved by the Food and Drug Administration; and
• Misreporting sales prices for Serzone, an antidepressant, resulting in the underpayment of rebates owed under the Federal Medicaid Drug Rebate Program.

The settlement reimburses the federal government and participating states for excessive amounts their Medicaid programs paid for BMS products as a result of the alleged illegal conduct. As part of the settlement, BMS entered into a Corporate Integrity Agreement with the Office of the Inspector General of the U.S. Department of Health and Human Services, which requires BMS to accurately report its average sales prices and average manufacturer prices, governing Medicaid and Medicare reimbursement for its products in the future.