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As part of a settlement agreement involving state and federal investigators and drug company Bristol-Myers Squibb Co., Tennessee will receive $3.5 million to offset fraudulent charges to the state's managed Medicaid program, TennCare.
In addition, the settlement calls for $4 million to reimburse the federal government for matching dollars paid through TennCare, state officials said.
New York-based Bristol-Myers and its former subsidiary Apothecon agreed in September to pay more than $515 million to settle accusations of illegal marketing and pricing of prescription drugs, according to the U.S. Department of Justice.
The drug company's overcharges for prescription drugs has cost Medicaid programs nationwide more than $389 million.
Georgia's Medicaid program will receive a total of $12 million, including $7 million that will be credited back to the federal government and used in place of federal matching dollars for the state's Medicaid program, said Russ Willard, spokesman for the Georgia state attorney general's office.
Charges against Bristol-Myers included reporting inflated drug prices to get higher payments from state Medicaid programs and paying kickbacks to doctors and pharmacies to persuade them to buy the company's products.
Federal investigators also alleged that the company promoted the use of anti-psychotic drug Abilify for use in children and to treat dementia, though the drug was not FDA approved for these "off-label" uses.
"This is a significant case, and we hope this will lead to better practices and greater accountability in this segment of the health care industry," said Tennessee Attorney General Bob Cooper in an e-mail statement.
Tennessee government officials said they have not yet received the money nor decided how the funds will be distributed.
"We just don't know enough about it at this point to say where the money would be allocated, if it would go into a reserve fund or what we might do with it," Lola Potter, spokeswoman for the Tennessee Department of Finance and Administration, said Monday.
As part of the settlement, Bristol-Myers also entered into a corporate integrity agreement with the Office of Inspector General of the U.S. Department of Health and Human Services. The agreement requires the company to accurately report its average sales prices and average manufacturers prices. The company does not face criminal charges.
Rebecca Goldsmith, spokeswoman for Bristol-Myers, said in an e-mailed statement that the company "is pleased to have resolved these matters from the past and is proud of its commitment to conduct business with the highest standards of integrity in its mission to extend and enhance human life."
To see more of the Chattanooga Times/Free Press, or to subscribe to the newspaper, go to http://www.timesfreepress.com. Copyright (c) 2008, Chattanooga Times/Free Press, Tenn. Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
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