Bristol-Myers, Otsuka ask judge to nix Abilify kickback suit

Did Bristol-Myers Squibb ($BMY) offer kickbacks and push Abilify for off-label uses? Some former sales reps-turned-whistleblowers claim it did. And given the fact that Bristol-Myers already paid $515 million to settle some off-label marketing claims related to Abilify, they say, the company violated its "we'll behave" promises to the feds.

The whistleblower suit, now spearheaded by the U.S. Department of Justice, also ropes in the U.S. unit of Japan's Otsuka, which co-promotes the drug. Otsuka has its own corporate integrity agreement, too.

So, with their latest amended complaint in the False Claims Act suit, filed last month, the former reps say the court is looking at a couple of repeat offenders.

The allegations are typical of whistleblower marketing claims: The reps say BMS and Otsuka pushed Abilify for use in children before the drug was approved to treat anyone under 18, and that after a couple of pediatric approvals came through, they promoted Abilify for indications still not FDA-approved for kids. Plus, they say the companies used speaking fees, free lunches and dinners, paid programs, and other incentives to persuade docs to write more scripts.

Of course, Bristol-Myers and Otsuka don't agree. This week, the two companies separately asked U.S. District Judge William O. Bertelsman to toss out the whistleblower claims against them.

Otsuka, in fact, uses its corporate-integrity promises to deflect the off-label allegations, suggesting that the company wouldn't have the temerity to break marketing rules at a time when it was wrapping up settlements in its previous marketing case.

Otsuka also claims that the whistleblowers pulled it into the lawsuit only by virtue of its marketing deal with Bristol-Myers, not because they had specific evidence that Otsuka reps participated in any off-label promotions or kickback offers. The Japanese drugmaker also says that the lawsuit doesn't include evidence of any specific false claims to Medicare or Medicaid--and that, Otsuka contends, makes the complaint invalid.

Bristol-Myers uses a similar argument, saying that the Justice Department doesn't offer enough detail about off-label claims to the government health programs. So, Bristol-Myers claims, the FCA allegations don't have enough basis for the suit to continue.

The companies better hope that Judge Bertelsman agrees. If the lawsuit goes forward--and the DOJ is persuasive enough--they could be facing bigger penalties than they did in their previous marketing settlements. The feds cited Pfizer's ($PFE) previous corporate integrity agreement as one reason for the record-setting criminal fine they levied in the company's 2009 settlement.

- read the amended complaint (PDF)
- check out Bristol-Myers motion to dismiss (PDF)
- see Otsuka's motion (PDF)

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