Washington State

Office of the Attorney General

Attorney General

Bob Ferguson

Jul 22 2008

Bristol-Myers Squibb Company (BMS) and its former subsidiary Apothecon, Inc. has agreed to pay the state of Washington nearly $6.8 million to settle allegations of illegal marketing and pricing of prescription medications, Attorney General Rob McKenna announced today.

“This settlement recovers millions of dollars dedicated to paying for medications for some of our most needy citizens,” McKenna said. “This work is part of our continuing endeavor to aggressively pursue abusers of our Medicaid system. I want to thank Washington State Medicaid Fraud Control Unit Director Dawn Cortez and Investigator Terry Tate for handling this settlement for the State of Washington.”

The National Association of Medicaid Fraud Control Units announced July 16 that 43 states, the District of Columbia and the federal government settled with Bristol-Myers Squibb Company (BMS) and its former subsidiary Apothecon, Inc.

BMS has agreed to pay $389 million plus interest to compensate states’ Medicaid programs, which were overcharged for prescription medications. The federal portion of the settlement was concluded last fall. Washington will receive $6,795,914 of the settlement amount.

The settlement addresses allegations that BMS engaged in a number of improper marketing and pricing practices, including:

• Reporting inflated prices for prescription drugs knowing that Medicaid and other federal health care programs would use these prices to pay for BMS and Apothecon products used by their recipients;

• Paying illegal fees to physicians, health care providers, and pharmacies to induce purchasing of BMS and Apothecon products;

• Promoting the sale and use of Abilify, an antipsychotic drug, for pediatric patients and for the treatment of dementia-related psychosis, uses which the federal Food and Drug Administration has not approved; and

• Misreporting sales prices for the antidepressant Serzone, resulting in the improper reduction of rebates paid to state Medicaid programs.

The settlement reimburses the federal government and participating states for excessive amounts paid by Medicaid programs as a result of this conduct.

The settlement also requires that BMS enter into a Corporate Integrity Agreement with the Office of Inspector General at the U.S. Department of Health and Human Services, requiring the accurate reporting of its average sales and manufacturers’ prices.



Janelle Guthrie, AGO Communications Director, (360) 586-0725