In July 2016, California Insurance Commissioner Dave Jones reached a $30 million settlement with pharmaceutical company Bristol-Myers Squibb over allegations of drug marketing fraud and physician kickbacks. As we have seen often as of late, the allegations stemmed from whistleblowers – in this case, three former Bristol-Myers Squibb sales representatives.
The suit, originally filed in 2007, 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 obtain patients or clients. The kickbacks were designed to increase physician prescriptions of several drugs produced by Bristol-Myers Squibb, including Pravachol (used to lower cholesterol). Bristol-Myers Squibb allegedly provided physicians – and physician’s families – with various gifts and cash. Some of the gifts included:
- Box suites at sporting events where physicians were provided tickets, food, drinks and parking;
- Pre-paid golf outings at luxurious golf courses;
- Tickets for families to see Broadway plays in California cities; and
- Lavish dinners, resort hotel trips, and concert tickets.
Bristol-Myers Squibb released 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.
Interestingly, in the “Media Notes” portion of the California Insurance Commissioner’s press release of the settlement, they included links to ProPublica (“Online information about money received by doctors”) and to the California compliance law code.
A Bristol-Myers spokesman stated that the company denied any wrongdoing, and that the firm began adhering to a voluntary industry marketing code in 2002, writing, “We are pleased to put this matter behind us so that we can focus on making transformational medicines for patients battling serious diseases.”
This settlement follows a September 2007 settlement with the Department of Justice wherein Bristol-Myers Squibb agreed to pay over $515 million to resolve civil allegations involving their drug marketing and pricing practices.