California Insurance Commissioner Dave Jones reached a $30 million settlement with pharmaceutical giant Bristol-Myers Squibb over allegations of drug marketing fraud and physician kickbacks.
The settlement stems from charges in a whistleblower lawsuit filed by three former Bristol-Myers Squibb sales representatives. Jones joined the whistleblowers in the lawsuit.
The lawsuit alleged that Bristol-Myers Squibb violated the California Insurance Frauds Prevention Act by employing and using sales representatives for the purpose of defrauding private commercial health insurers by using kickbacks to procure patients or clients.
The kickbacks were reportedly designed to increase physician prescriptions of several drugs produced by Bristol-Myers Squibb including Pravachol, used to lower cholesterol. As part of its alleged scheme, Bristol-Myers Squibb provided physicians and their families with gifts and cash to induce physicians to increase prescriptions for Bristol-Myers Squibb products.
Enticements reportedly included:
- Box suites at sporting events where physicians were provided tickets, food, drinks and parking.
- Enrollment in a Lakers basketball camp for doctors and their children.
- Pre-paid golf outings at golf courses.
- Tickets for physicians and their families to see Broadway plays in California cities.
- Monetary incentives given to doctors responsible for prescription-drug decisions for formularies.
- Lavish dinners, resort hotel trips, and concert tickets, given to doctors who were large-volume prescribers, to induce more prescriptions in the future.
In addition to the $30 million payment, the settlement agreement with the commissioner requires Bristol-Myers Squibb to affirm its commitment to abiding by California laws regulating its sales representatives’ interactions with doctors, including compliance with pertinent provisions of the California Health and Safety Code and the California Insurance Frauds Prevention Act. Among other requirements, Bristol-Myers Squibb is required to utilize a Comprehensive Compliance Program that is in accordance with the Office of Inspector General’s “Compliance Program Guidance for Pharmaceutical Manufacturers.”
“Patients have a right to expect medications prescribed for them are based solely on medical need and not because the physician was given tickets to a sporting event or treated to a lavish golf outing,” Jones said in a statement.
Bristol-Myers provided the following statement:
“We have resolved this matter with the California Department of Insurance, and are committed to the highest standards of business integrity, vigilance and ethics across our organization. Bristol-Myers Squibb denies any wrongdoing in this matter and we are pleased to put this matter behind us so that we can focus on making transformational medicines for patients battling serious diseases. The Company has chosen this path to achieve a prompt and full resolution of the claims based on alleged marketing practices in California that purportedly occurred from 1997-2003, and to ensure that we continue to focus on our mission of discovering, developing, and delivering innovative medicines to patients with serious illnesses.”
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