Squibb settles with states for $403 million

Chris Rizo Jul. 15, 2008, 5:00pm

Lisa Madigan (D)

New York (Legal Newsline)- Pharmaceutical giant Bristol-Myers Squibb has agreed to pay state Medicaid programs a combined total of $403 million to settle lawsuits against the company and its former wholly owned subsidiary Apothecon, Inc.

The settlement resolves lawsuits filed against the New York-based drugmaker by 44 states and the District of Columbia over the company's marketing and pricing of prescription medications paid by the participating states' Medicaid programs.

For instance, New York says it's getting $40 million from the multistate settlement; Illinois $10 million; Massachusetts will receive $9 million; Missouri, $11 million; Ohio gets $6.5 million; and Connecticut, $2 million.

"We will continue to hold pharmaceutical companies accountable when they don't follow the law," Illinois Attorney General Lisa Madigan said in a statement.

"When drug companies do this, they prevent our Medicaid programs from receiving needed resources and, ultimately, harm the patients who benefit from these programs," the Democrat added.

The company was accused of reporting inflated prices for various prescription drugs. The figures are used by states and federal health care programs to help determine the prices they pay for Squibb and Apothecon products.

They were also accused of paying healthcare providers and pharmacies incentives to purchase Squibb and Apothecon products as well as promoting the sale and use of the antipsychotic drug Abilify for unapproved uses.

In addition to settling state and federal claims, Bristol-Myers Squibb has entered into a Corporate Integrity Agreement with the Office of Inspector General of the U.S. Department of Health and Human Services that requires the drug company to report its average sales prices and average manufacturers prices in the future.

From Legal Newsline: Reach reporter Chris Rizo at chrisrizo@legalnewsline.com.

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