Bristol's $499M drug-pricing settlement among biggest
By Julie Schmit
USA TODAY
December 22, 2006
Drugmaker Bristol-Myers Squibb said Thursday that it would pay $499 million to settle federal investigations into its pricing, sales and marketing practices.
The tentative agreement is one of the biggest in recent years for drugmakers regarding drug marketing and pricing.
It aims to settle investigations into Bristol's marketing of schizophrenia and bipolar disorder drug Abilify for conditions the drug was not approved to treat, says Bristol spokesman Jeff Macdonald.
It also covers some cases in which Bristol allegedly inflated drug prices so government programs for the poor and elderly paid more.
It would not negate other so-called average wholesale price cases launched against Bristol by several states and others, Bristol said.
No criminal charges would be filed against Bristol. The agreement is subject to approval by the U.S. Department of Justice and was struck with Justice and the U.S. Attorney for the District of Massachusetts. Their investigation covered more than five years through 2005. It included several other drugs that Bristol declined to name. The U.S. Attorney's office declined comment.
Doctors can prescribe drugs for whatever reason. But drugmakers cannot promote them to treat conditions unless the Food and Drug Administration approves them for that condition.
Numerous drugmakers are or have been under investigation for marketing. In August, Schering-Plough agreed to pay $435 million to settle federal civil and criminal charges that it illegally promoted several drugs and defrauded Medicaid.
Serono settled similar charges last year involving AIDS drug Serostim, as did Pfizer in 2004 involving pain and anti-seizure drug Neurontin.
Settling the investigation would remove one cloud of uncertainty over Bristol, says Moody's Investors Service pharmaceutical analyst Michael Levesque. Bristol shares closed up 1% Thursday at $26.05. Bristol expects 2006 earnings to range from 72 cents a share to 77 cents a share, down from its prior outlook of 97 cents to $1.02 a share. Excluding one-time items, it still expects earnings of $1.02 to $1.07 a share.
Bristol still faces a federal investigation into a failed patent settlement for blood-clot drug Plavix, its biggest-selling drug. In September, it ousted CEO Peter Dolan for mishandling Plavix and has an interim CEO. This agreement would require Bristol to enter into a corporate integrity agreement with the U.S. Department of Health and Human Services.
