After nearly a decade of litigation, Bristol-Myers Squibb on Monday agreed to pay $30 million to settle charges by California officials of paying kickbacks to induce doctors to prescribe several of its medicines.
The settlement with the California Department of Insurance stemmed from a whistleblower lawsuit that was filed in 2007 by three former Bristol-Myers employees. They alleged that from 1997 through 2003, the drug maker used a wide variety of inducements to generate revenue. The state later joined the lawsuit in 2011 and, last year, the former employees were dismissed from the case by a state court.
The kickbacks included box seats at sporting events where doctors were given food, drinks, and parking; enrollment in a Los Angeles Lakers basketball camp for doctors and their children; prepaid golf outings at luxury courses; tickets for doctors and their families to see Broadway shows in California cities; and lavish dinners, resort hotel trips, and concert tickets for doctors who were especially big prescribers.
Among the many medicines for which doctors were persuaded to write more prescriptions were the Pravachol cholesterol pill; the Plavix blood thinner; the Abilify antipsychotic; the Glucophage diabetes treatment; and the BuSpar antianxiety drug.
A Bristol-Myers spokesman wrote us that the company denied any wrongdoing, but also noted that the firm began adhering to a voluntary industry marketing code in 2002. “We are pleased to put this matter behind us so that we can focus on making transformational medicines for patients battling serious diseases,” he wrote.
The deal is only the latest in a long line of such settlements involving large drug makers that have been accused of using illegal tactics to boost sales. Over the years, nearly every big pharmaceutical company has paid fines or reached settlements to resolve civil or criminal complaints that involved kickbacks or marketing medicines for unapproved uses.
From 1991 through 2015, drug makers paid $35.7 billion to settle federal and state civil and criminal charges of fraudulent practices, according to a recent analysis by Public Citizen, the consumer advocacy group. Bristol-Myers, in fact, paid $515 million in 2007 as part of a deal with the feds in response to separate whistleblower lawsuits filed against the company.
In recent years, however, the pharmaceutical industry has argued such violations have dwindled in response to the many settlements. These often required companies to sign documents known as corporate integrity agreements that stipulate drug makers must adopt new procedures and executives take added responsibility for infractions.
The Public Citizen report noted, in fact, that pharmaceutical companies paid approximately $2.8 billion to settle various federal and state charges in 2014 and 2015, compared with $9.9 billion during 2012 and 2013. The most recent payments also amounted to the lowest two-year total since 2004 and 2005, according to its analysis.
Nonetheless, some companies continue to run afoul of the feds. Last month, two former sales employees at Insys Therapeutics were indicted for allegedly paying doctors to participate in sham educational programs designed to boost prescriptions of Subsys, an addictive opioid painkiller. Their alleged scheme took place from October 2013 through June 2015.
And later this year, Novartis (NVS) is scheduled to go on trial for allegedly using illegal tactics to persuade doctors to write prescriptions for some of its medicines. The drug maker already settled a separate case last fall for $390 million. In both instances, the feds charged the company ultimately caused government health care programs to overpay for Novartis drugs.