SEVEN REPORTS OF SQUIBB MISCONDUCT

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Seven Reports of Squibb Misconduct

(#1 of 7)    04Aug2004    $150 Million


04Aug2004      sec.gov

Bristol-Myers Squibb Company Agrees to Pay
$150 Million to Settle Fraud Charges

Washington, D.C., Aug. 4, 2004 — The Securities and Exchange Commission today announced that it filed an enforcement action against Bristol-Myers Squibb Company, a New York-based company whose largest division, the U.S. Medicines Group, is based in New Jersey.  The Commission's complaint, filed today in the United States District Court for the District of New Jersey, alleges that Bristol-Myers perpetrated a fraudulent earnings management scheme by, among other things, selling excessive amounts of pharmaceutical products to its wholesalers ahead of demand, improperly recognizing revenue from $1.5 billion of such sales to its two largest wholesalers and using "cookie jar" reserves to meet its internal sales and earnings targets and analysts' earnings estimates.

In settling the Commission's action, Bristol-Myers agreed to an order requiring it to pay $150 million dollars and perform numerous remedial undertakings, including the appointment of an independent adviser to review and monitor its accounting practices, financial reporting and internal controls.

Stephen M. Cutler, Director of the SEC's Division of Enforcement, said, "Bristol-Myers' earnings management scheme distorted the true performance of the company and its medicines business on a massive scale and caused significant harm to the company's shareholders. The company's conduct warrants a stiff civil sanction. As our investigation continues, we will be focusing on, among other things, those individuals responsible for the company's failures."

Timothy L. Warren, Associate Regional Director of the SEC's Midwest Regional Office, added, "For two years Bristol-Myers deceived the market into believing that it was meeting its financial projections and market expectations, when, in fact, the company was making its numbers primarily through channel-stuffing and manipulative accounting devices. Severe sanctions are necessary to hold Bristol-Myers accountable for its violative conduct, and deter Bristol-Myers and other public companies from engaging in similar schemes."  [...]



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Seven Reports of Squibb Misconduct

(#2 of 7)    28Sep2007    $515 Million



Bristol-Myers Squibb to Pay More Than $515 Million
to Resolve Allegations of Illegal Drug Marketing and Pricing


28Sep2007    justice.gov

WASHINGTON — Bristol-Myers Squibb Company (BMS) and its wholly owned subsidiary, Apothecon, Inc., have agreed to pay over $515 million to resolve a broad array of civil allegations involving their drug marketing and pricing practices, United States Attorney Michael J. Sullivan announced today.  [..]

"The integrity of our health care system rests on physicians being able to make decisions based on the best interests of their patients," said Keisler.  "This settlement reflects the Justice Department’s strong commitment to holding drug companies accountable for devising and implementing fraudulent marketing and pricing schemes that undermine that decision-making process at the expense of federal health care programs for the poor and the elderly."

Sullivan added: "Patients are entitled to unbiased decision-making from their physicians and should not have to worry that financial inducements or lavish entertainment have influenced their physicians’ prescribing choices.  Kickbacks are especially nefarious when they are used as part of a marketing effort to convince physicians to prescribe drugs for uses that the Food and Drug Administration has not determined to be safe and effective."

"The government alleges that Bristol-Myers Squibb, among other wrongdoing, fraudulently inflated the cost of a drug used primarily to reduce the side effects of cancer treatments and other generic drugs without regard to the increased costs borne by government health care programs or elderly and indigent patients," said U.S. Attorney R. Alexander Acosta of the Southern District of Florida.  "Corporations cannot continue to mislead the government into paying vastly exaggerated prices by exploiting a health care system based on trust and fair play."

Today’s settlement covers a wide assortment of illegal marketing and pricing practices.

First, the Government alleged that, from approximately 2000 through mid-2003, BMS knowingly and willfully paid illegal remuneration to physicians and other health care providers to induce them to purchase BMS drugs.  BMS paid the illegal remuneration in the form of consulting fees and expenses to physicians and other health care providers to participate in various consulting programs, advisory boards, and preceptorships.  Some of these programs involved travel to luxurious resorts.  The Government also alleged that, from 1994 through 2001, Apothecon knowingly and willfully paid illegal remuneration such as stocking allowances, price protection payments, prebates, market share payments, and free goods in order to induce its retail pharmacy and wholesaler customers to purchase its products.  In both cases, the Government alleged that, by paying this illegal remuneration to physicians and others, BMS and Apothecon knowingly caused the submission of false and fraudulent claims to the federal health care programs.

Second, the Government alleged that, from 2002 through the end of 2005, BMS knowingly promoted the sale and use of Abilify, an atypical antipsychotic drug, for pediatric use and to treat dementia-related psychosis, both "off-label" uses.  The Food and Drug Administration has approved Abilify to treat adult schizophrenia and bi-polar disorder, but has not approved the use of Abilify for children and adolescents or for geriatric patients suffering from dementia-related psychosis.  Indeed, the FDA has mandated that the package for Abilify carry a "black box" warning concerning its use in the treatment of dementia-related psychosis.  Nonetheless, BMS directed its sales force to call on child psychiatrists and other pediatric specialists, and the sales force then urged physicians and others providers to prescribe Abilify for pediatric patients.  BMS also created a specialized long term care sales force that called almost exclusively on nursing homes, where dementia-related psychosis is far more prevalent than schizophrenia or bipolar disorder.

Third, the Government alleged that both BMS and Apothecon set and maintained fraudulent and inflated prices for a wide assortment of oncology and generic drug products with the knowledge that federal health care programs established reimbursement rates based on those prices.  [...]

Finally, the Government alleged that BMS knowingly misreported its best price for the anti-depression drug, Serzone.  Under the provisions of the Medicaid Drug Rebate Statute, BMS was required to report to Medicaid the lowest, or "best" price, for Serzone that it charged its commercial customers.  In making its mandatory best price reports, BMS knowingly failed to include the low prices at which it sold "private-label" Serzone to Kaiser, a large commercial purchaser.  As a result, BMS denied the Medicaid program and certain Public Health Service entities the benefit of the lowest price in the marketplace.  [...]



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Seven Reports of Squibb Misconduct

(#3 of 7)    06Apr2009    $1 Million



Former Bristol-Myers Squibb Senior Executive Pleads Guilty
for Role in Dishonest Dealings with the Federal Government


Monday, April 6, 2009    justice.gov

WASHINGTON — A former senior executive of Bristol-Myers Squibb Company (BMS), Andrew Bodnar, pleaded guilty for his role in BMS’s dishonest dealings with the federal government relating to a patent deal involving the popular blood-thinning drug Plavix, the Department of Justice announced today.  This plea agreement follows BMS’s June 11, 2007, agreement to plead guilty and pay a $1 million criminal fine — the maximum fine permitted by statute — for misleading the government about the Plavix patent deal.  The Department said that the illegal actions of BMS and its executive threatened to reduce competition that could have lowered the cost of blood-thinning drugs sold to heart attack, stroke and other patients.  [...]

"The prosecutions of BMS and its former senior executive, Andrew Bodnar, should send a strong message to the pharmaceutical community that attempts to undermine the federal government’s critical role of ensuring Americans have access to life-saving drugs, like Plavix, at the most competitive prices will not be tolerated," said Scott D. Hammond, Acting Assistant Attorney General in charge of the Department’s Antitrust Division.  "Those who attempt to mislead the federal government or undermine the integrity of its functions should expect to face criminal prosecution."  [...]



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Seven Reports of Squibb Misconduct

(#4 of 7)    21Feb2014    Crime pays



Crime Pays for Drug Companies

Stephen R. Smith, M.D., M.P.H.,    Community Catalyst physician consultant
21Feb2014    communitycatalyst.org    [bold emphasis added to Squibb]

Abilify (aripiprazole) has become the best selling drug in the United States, topping $1.5 billion in the third quarter of 2013, outselling Nexium, the second-best selling drug.  How is it that Abilfy, approved by the Food and Drug Administration (FDA) primarily for the treatment of schizophrenia and acute mania in bipolar disorder, can outsell a drug like Nexium that is used to treat heartburn?

The answer is that Abilify is being prescribed "off label" for a wide range of conditions for which the drug is not FDA approved.  [...]]

This would be bad enough if Abilify was a safe and inexpensive medication.  Unfortunately, it is neither.

Like all antipsychotic medications, Abilify is a powerful drug that also comes with serious and potentially dangerous side effects.  Tardive dyskinesia — a permanent movement disorder that has no cure — is associated with Abilify and other antipsychotics.  Neuroleptic malignant syndrome, a rare but sometimes fatal complication that causes high fever and shock, is also associated with Abilify and these other drugs.

More common adverse effects include episodes of low blood pressure that can cause falls and high blood sugar that can lead to diabetes.  And all antipsychotics cause significant changes in a person’s thought patterns and behavior.  [...]

And Abilify is expensive.  A 30-day supply of the lowest dose costs more than $825.  Older antipsychotic drugs like haloperidol cost as little as $4 a month.  [...]  Due to their potentially serious risks, antipsychotic drug shouldn’t be used except when absolutely necessary.

One reason Abilify is prescribed so often for uses other than those approved by the FDA is illegal marketing for off-label use by pharmaceutical sales representatives.  Bristol-Myers-Squibb paid $515 million in 2007 to settle an investigation into illegally promoting the off-label uses of Abilify.

That penalty — the third largest for any drug company at that time — is what Bristol-Myers-Squibb makes from Abilify sales in one month.

If you want to be cynical about it, the message to drug companies is — crime pays.  No one went to jail.  Sales of Abilify are booming.  Shareholders are happy.

The sadder truth is that Bristol-Myers-Squibb is not alone.  Most of the biggest drug manufacturers have paid large fines for illegal off-label promotion.  Two drugmakers — Abbott and Eli Lilly — like Bristol-Myers-Squibb, targeted their marketing to doctors and nursing homes to boost the unapproved uses of strong antipsychotics to treat seniors with dementia, all the while knowing that these drugs caused an increased risk of death in this vulnerable population.

So what about the patients who were put on Abilify or one of these many other drugs inappropriately?  How many are walking around like zombies?  How many have fallen and broken bones?  How many have developed diabetes?  How many are plagued by involuntary muscle contortions that can never be cured?  And how many have died?

Consider, too, the economic cost to the rest of us who have to pay higher premiums for our health insurance and higher taxes to pay for government health programs.

A slap on the wrist with a fine that can be recouped in a month will never stop illegal marketing by drug companies.  [...]

Sales reps, their supervisors, and, most importantly, the company executives need to be put behind bars to make this practice stop.  This isn’t just a white collar crime.  Innocent patients are suffering and dying as a result of corporate greed.  [...]

To put an end to illegal off-label marketing, we need to make the drug company executives feel the same pain as the patients they’re afflicting.  We need to make sure that this crime doesn't pay.



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Seven Reports of Squibb Misconduct

(#5 of 7)    11Oct2015    $14.6 Million, China


Four Clear Messages from Bristol-Myers Squibb
FCPA Enforcement Action


Michael Volkov    11Oct2015    blog.volkovlaw.com

The SEC’s FCPA enforcement action for $14.6 million against Bristol-Myers Squibb ("BMS") in China provides a textbook example of how things can go wrong in China.  [...]

The facts underlying the BMS enforcement action are fairly common when it comes to China and pharmaceutical companies.  Healthcare professionals ("HCPs") demand gifts, cash, gift cards, conference sponsorships, speaking fees, and other benefits in exchange for prescriptions.  The headline is pretty basic — no gifts, no prescriptions.

BMS employees responded to this demand — they used fake invoices and receipts, which are easy to secure in China, and other sources of cash to fund this bribery program.  BMS employees had little difficulty in getting the cash they needed and paying the bribes that were required to keep their sales growing and meet significant sales requirements.

This bribery scheme continued without any real concern, even when senior executives, as well as the Audit Committee, were warned about potential problems and weaknesses in BMS’ controls in China governing such expenditures.  There was no evident commitment to a culture of compliance; if anything, the incentives and the controls that were in place, and never remedied, communicated an implicit culture of non-compliance and sales at any cost.



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(#6 of 7)    19Jul2016    $30 Million



Bristol-Myers pays $30 million to settle kickback charges

By Ed Silverman @Pharmalot    19Jul2016    statnews.com


Mel Evans/AP

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 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.  [...]

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.  [...]

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 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.



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Seven Reports of Squibb Misconduct

(#7 of 7)    08Dec2016    $19.5 Million


ATTORNEY GENERAL MAURA HEALEY    08Dec2016    mass.gov

Bristol-Myers Squibb to Pay $19.5 Million for Alleged Improper Drug Marketing to Encourage Prescriptions to Children, Elderly

AG Healey Joins Multistate Settlement; Massachusetts to Receive More Than $400,000

BOSTON — Resolving allegations that it improperly marketed an antipsychotic drug to children and elderly patients, Bristol-Myers Squibb Company (BMS) has agreed to pay a total of $19.5 million in a multistate settlement, including more than $400,000 to Massachusetts, Attorney General Maura Healey announced today.

In a complaint filed today in Suffolk Superior Court along with a consent judgment, AG Healey alleges that BMS engaged in unfair and deceptive trade practices when it marketed an atypical antipsychotic drug known as Abilify.  [...]

In particular, BMS promoted Abilify for use in elderly patients with symptoms consistent with dementia and Alzheimer’s disease, despite the lack of FDA approval for these uses, and without first establishing the drug’s safety and efficacy for those uses.  In 2006, Abilify received a "black box" warning stating that elderly patients with dementia-related psychosis who are treated with antipsychotic drugs have an increased risk of death.

Additionally, the complaint alleges that BMS promoted Abilify for uses in children not approved by the FDA, minimized and misrepresented Abilify’s risks, and overstated the findings of scientific studies by not revealing limitations that would materially affect the interpretation of the study results.  [...]