The California Department of Insurance reached a $30 million settlement with pharmaceutical giant Bristol-Myers Squibb over allegations of drug marketing fraud and physician kickbacks. The settlement stems from charges in a whistleblower lawsuit filed by three former Bristol-Myers Squibb sales representatives. The California Department of Insurance joined the whistleblowers in the lawsuit.
This lawsuit was initially filed by former Bristol-Myers Squibb employees Michael Wilson and Lucius and Eve Allen, all of whom are represented by the law firm of Waters Kraus & Paul in Los Angeles. Lucius Allen is a former Los Angeles Lakers basketball player.
The plaintiffs 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 procure 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. As part of its alleged scheme, Bristol-Myers Squibb provided physicians and their families with gifts and cash to induce physicians to increase prescriptions for Bristol-Myers Squibb products.
Enticements included box suites at sporting events where physicians were provided tickets, food, drinks, and parking. Enrollment in a Lakers basketball camp for doctors and their children. Pre-paid golf outings at luxurious golf courses. Tickets for physicians and their families to see Broadway plays in California cities.Monetary incentives given to doctors responsible for prescription-drug decisions for formularies. Lavish dinners, resort hotel trips, and concert tickets, given to doctors who were large-volume prescribers, to induce more prescriptions in the future.
Insurers alleged to have been defrauded: Prudential, Cigna, Maxicare, Blue Cross/Blue Shield of California (name of entity at time lawsuit was filed), HMSA Health Plan Hawaii, Scan Health Plus, United Health Plan, CalOptima, Argus, Merck-Medco, PCS, Prosever, Express RX/Value RX/DPS, Caremark, MedImpact/MedCare, Envoy, Aetna Pharmacy Management, Pharmaceutical Care Net, Advance PCS, Rx America, Prescription Solutions, WellPoint Pharmaceutical Management, First Health, Save-Rx, PacifiCare, and Health Net.
Medications in kickback scheme included: Plavix, Pravachol, Monopril, Abilify, Glucovance, Metaglip, Glucophage, Glucophage XR, Cefzil, BuSpar, Serzone, Tequin, Pravigard, and Avapro.
In addition to the $30 million payment, the settlement agreement requires Bristol-Myers Squibb to affirm its commitment to abiding by California laws regulating its sales representatives’ interactions with doctors, including compliance with pertinent provisions of the California Health and Safety Code and the California Insurance Frauds Prevention Act. Among other requirements, Bristol-Myers Squibb is required to utilize a Comprehensive Compliance Program that is in accordance with the Office of Inspector General’s “Compliance Program Guidance for Pharmaceutical Manufacturers.”
As required by the state’s insurance whistleblower law, Bristol-Myers Squibb’s settlement payment will be divided between the whistleblowers and the State of California. The state will receive $14.1 million, to be used to enhance the investigation and prevention of insurance fraud. Bristol-Myers Squibb did not admit to wrongdoing in the settlement agreement.