September 28, 2007 Bristol-Myers Squibb (BMS) and its wholly owned subsidiary, Apothecon Inc., have agreed to pay more than $515 Million to settle False Claim allegations asserted by private relators. The allegations of the case were that BMS engaged in a type of scheme known as “marketing the spread.” Marketing the spread is a scheme within which the manufacturer of a drug or medical device provides a false inflated price for their product to the government, and then actually sells their product at a lower price to hospitals, clinics and/or doctors. When a doctor buys the manufacturer’s drugs, and then seeks reimbursement from the federal government, the government reimburses the doctor at the falsely inflated price which had been reported to the government by the manufacturer. This enables the hospitals, clinics and doctors to pocket the difference (known as “the spread”) between what the manufacturer actually charged them for the sale of the drug or device, and the higher amount which the government reimbursed the hospital, clinic or doctor for the drug or device. The greater the difference, known as “the spread,” the greater the financial incentive for doctors and hospital to prescribe the manufacturer’s drugs, or devices. Manufacturers can also defraud the government and market the spread, by actually paying money to the hospitals, clinics or doctors, through various means. In the BMS case, the allegations were that BMS marketed the spread by: paying health care providers “consulting fees,” paying for travel to luxurious resorts, giving them “prebates” and free goods. An additional claim in the case was that BMS promoted the sale and use of its drug Abilify, for one or more “off label” uses, which means marketing the drug to health care providers for one or more uses which have not been approved by the FDA. In the case of Abilify, the FDA has not approved the use of Abilify for children, but BMS directed its sales force to call on child psychiatrists and other pediatric specialists, and the sales force then urged physicians and other providers to prescribe Abilify for children. As a result of having filed a qui tam action to expose these allegations, the persons who filed the claims are to receive $50 Million Dollars, as a reward. See U.S. Dept of Justice Press Release 09/28/07 |