The Los Angeles Times reports that pharmaceutical giant Bristol-Myers Squibb has been accused of bribing thousands of California doctors with illegal kickbacks. Some of the benefits the company allegedly used to expand its market share were Los Angeles Lakers “happy hours.” This new allegation has been added to a previously sealed whistle blower lawsuit against Bristol-Myers Squibb, making it the largest health insurance fraud case ever pursued against a California agency.
Former Laker and Bristol-Myers employee blew the whistle
Lucius Allen, a former Lakers player, and his wife Eve worked for Bristol-Myers Squibb and claim that they provided California doctors and their families access to the basketball team in what are being called “Lakers Dream Camps.” That led to a 2007 lawsuit, which had been sealed until California joined just recently. In the same year that the Los Angeles Lakers fraud lawsuit originated, Bristol-Myers Squibb paid out $515 million to settle a separate suit involving federal allegations that the company was defrauding Medicare and Medicaid insurance through a series of kickback schemes.
Predictably, the pharmaceutical company issued a statement involving the recently unsealed case in which it denied wrongdoing and acknowledged that it will defend itself to the fullest extent of the law.
Payouts for ‘high-prescribing doctors’
In addition to access to the Los Angeles Lakers, Bristol-Myers Squibb is being accused of making thousands of cash payments to doctors who wrote prescriptions for high-profile drugs such as Plavix (for stroke and heart attack prevention), Abilify (for schizophrenia and mania) and Pravachol (to reduce harmful cholesterol).
California Insurance Commissioner Dave Jones stated in a press conference that California insurance companies paid out as much as $3.5 billion to cover the cost of such Bristol-Myers Squibb drugs as part of its alleged kickback scheme.
“We need to be sure that doctors are prescribing drugs because those drugs are best for their patients and not because a pharmaceutical company provided doctors with trips and kickbacks,” Jones said. “These illegal practices drive up the cost of health insurance for millions of Californians.”
Does doing more for less lead to desperate measures?
Biotech Ethics suggests that big pharma companies like Bristol-Myers Squibb face constant pressure to innovate and pump out new drugs. Considering skyrocketing research and development costs, patent expiration and generic competition – as well as the still-weak economy that has forced staff cutbacks – companies could easily fall into the traps of cutting corners and engaging in less-than-ethical behavior. California courts have proven to be unsympathetic to the difficulties facing pharmaceutical companies, however.
Sources
Biotech Ethics: http://biotechethics.org/building-biotech-technology-transfer-opportunities-sponsor-and-developer-strategies-for-success/
Bristol-Myers Squibb: http://www.bms.com/pages/default.aspx
Los Angeles Times: http://www.latimes.com/business/la-fi-drug-kickbacks-20110319,0,5610786.story
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