UPDATED: California snares $30M in Bristol-Myers kickbacks case featuring luxury golf, lavish dinners and Lakers camp

Golf outings at top courses. Box suites at sporting events. A Los Angeles Lakers basketball camp. And the usual “lavish dinners.” They all figured into a California crackdown on Bristol-Myers Squibb’s marketing, the state’s insurance commissioner said Monday.

Bristol-Myers agreed to pay $30 million to settle fraud and kickbacks allegations in a whistleblower lawsuit filed by three former sales reps. Commissioner Dave Jones’ office joined the whistleblowers in suing the company.

"Patients have a right to expect medications prescribed for them are based solely on medical need and not because the physician was given tickets to a sporting event or treated to a lavish golf outing," Jones said in a Monday statement.

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Bristol-Myers says it is "pleased to put the matter behind us," and the company denies any wrongdoing. "The company has chosen this path to achieve a prompt and full resolution of the claims based on alleged marketing practices in California ... and to ensure that we continue to focus on our mission of discovering, developing, and delivering innovative medicines to patients with serious illnesses," Bristol-Myers said in an emailed statement, noting that the allegations are more than a decade old.

Marketing settlements are common in the pharma business, as the Justice Department, Securities and Exchange Commission and state attorneys general prosecute kickbacks, foreign bribery and other alleged violations, often in concert with whistleblowers. Bristol-Myers itself is no stranger to settlements; late last year, the company agreed to pay almost $15 million to settle SEC charges of bribery in China, and in 2007, it shelled out $515 million to wrap up a federal investigation into its Abilify marketing.

This latest settlement is notable, however, because it was the state that teamed up with whistleblowers, and Jones pursued charges under California insurance law. The lawsuit claimed that Bristol-Myers violated the California Insurance Frauds Prevention Act, by using kickbacks to “defraud” insurance companies.

It's also notable that the allegations themselves are practically ancient in the marketing business: They date back as far as 1997 and range only to 2003, which explains why the brands involved include long-off-patent meds such as the statin drug Pravachol.

Bristol-Myers reps entertained doctors in box suites at sporting events, handed out tickets to Broadway touring productions, and offered prepaid outings at “luxurious” golf courses, the commissioner’s office said. Doctors and their kids were sent to Lakers camps, and the company sent them on resort junkets, too.

“The kickbacks were designed to increase physician prescriptions of several drugs produced by Bristol-Myers Squibb,” the statement said, including the atypical antipsychotic Abilify, cholesterol fighter Pravachol and blood thinner Plavix. All three drugs are now off patent.

The Bristol-Myers settlement comes amid a wave of kickback cases. The Justice Department has pivoted toward kickbacks prosecutions over the last couple of years amid free-speech challenges to off-label marketing rules. Novartis, for instance, faces a kickbacks lawsuit that focuses on dinner parties at high-end restaurants.

Sometimes, a kickbacks crackdown will target individuals for criminal charges, too. This year, a former sales rep for the pain-focused pharma Insys pleaded guilty to kickbacks charges. And a high-profile criminal case featuring an ex-Warner Chilcott sales executive went to trial in May; he was found not guilty when the trial wrapped last month.

- see the insurance commission’s announcement

Special Report: Pharma's Top 11 Marketing Settlements - Bristol-Myers, Abilify

Related Articles:
Ex-Warner exec found not guilty in kickbacks trial, but the 'Yates memo' lives on
Novartis kickbacks case 'explodes' with feds' demand for backup on 80,000 doctor events
Bristol-Myers shells out $14.7M in China bribery settlement
In guilty plea, ex-Insys sales rep acknowledges she was the inducement in a kickback scheme
Judge tosses Abilify kickback claims, but puts BMS on notice for firing whistleblowers
Bristol-Myers, Sanofi catch a break in Plavix marketing case

Editor's note: This story was updated with comments from Bristol-Myers.

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