Fw: U.S. Pursues Probe of Bristol-Myers Over Marketing of AnticancerDrugs

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From: ilena rose <ilena@...>

Sent: Tuesday, February 27, 2001 1:07 PM

Subject: U.S. Pursues Probe of Bristol-Myers Over Marketing of

AnticancerDrugs

> February 27, 2001

> http://interactive.wsj.com/articles/SB983229110131302289.htm

>

> U.S. Pursues Probe of Bristol-Myers

> Over Marketing of Anticancer Drugs

>

> By DAVID S. CLOUD

> Staff Reporter of THE WALL STREET JOURNAL

>

> WASHINGTON -- Federal prosecutors have sent grand-jury subpoenas

> to Bristol-Myers Squibb Co. seeking information on the marketing of its

> anticancer drugs and other products, the company confirmed.

>

> Bristol-Myers Squibb is the second pharmaceutical company whose

> marketing efforts for its oncology treatments and other drugs

> administered

> by doctors have come under criminal scrutiny by federal prosecutors in

> Boston as part of a long-running federal-state probe of industry

> marketing

> practices. The first was TAP Pharmaceutical Products Inc., a Lake

> Forest,

> Ill., affiliate of Abbott Laboratories, that is now negotiating a plea

> deal.

>

> Investigators are looking at whether Bristol-Myers Squibb provided

> oncologists with inducements, such as free drugs and devices, in

> exchange

> for purchases of other Bristol pharmaceuticals, people involved say.

> Another focus is whether the company encouraged doctors to improperly

> bill Medicare, the federal health program for the elderly, and Medicaid,

> a

> federal-state program serving the low-income and the disabled.

>

>

>

> Investigation Expands

>

> Federal prosecutors' probe of major drug companies continues. Highlights

> of the

> case:

>

> The subpoena is part of a long-running state/federal probe of

> drug-industry marketing practices for cancer drugs and other

> injectible treatments.

>

> A major focus of the probe is determining whether drug companies

> marketed their products by providing doctors with free drugs and

> other inducements.

>

> Federal prosecutors in Massachusetts and Miami, and state

> prosecutors in Florida, Texas and California are involved.

>

>

>

> " We are cooperating fully with the investigation, "

> said Bristol-Myers

> Squibb spokesman Donohue. " The company believes that its

> pricing practices are fully compliant with all the applicable federal

> and state

> laws, including Medicare and Medicaid requirements. " He added that the

> company was in the process of " responding to [the] subpoenas, " which

> went out late last year.

>

> A spokeswoman for the Boston U.S. attorney's office declined to

> comment.

>

> A person familiar with the case said the subpoenas sought information on

> the selling practices of Oncology Therapeutics Network, a San Francisco

> drug wholesaler that is a unit of Bristol-Myers Squibb and that markets

> its

> drugs directly to doctors. Prosecutors are also seeking information on a

> software program, known originally as Lynx and now as Onyx, that the

> company provides to doctors to assist in billing of insurers. They want

> to

> know if the program facilitates the excess billing of Medicare and

> Medicaid

> by calculating reimbursements at a higher price than doctors pay for the

> same drugs.

>

> Industry analysts say that as a marketing

> strategy, Bristol-Myers Squibb, the largest

> supplier of oncology products, often bundles

> its anticancer drugs in its direct sales to

> doctors, allowing it to dominate the private-practice market.

>

> A team of Federal Bureau of Investigation agents in Boston is developing

> a

> list of Bristol-Myers Squibb marketing representatives and other

> employees to interview, a person familiar with the case said.

> Investigators

> are also looking at whether doctors committed criminal violations by

> billing

> insurers and the government for free Bristol-Myers drugs they received.

> That would appear to violate the Prescription Drug Marketing Act, a 1987

> statute that provides stiff 10-year prison terms and $250,000 fines for

> each

> such billing violation. The law also makes it a crime for drug companies

> to

> participate in a scheme.

>

> Prosecutors are also looking at the activities of Apothecon Inc., a

> Bristol-Myers Squibb subsidiary that produces generic drugs, a person

> involved said. Its pharmaceuticals are commonly dispensed by

> pharmacists, not doctors, and the probe is looking at whether the

> company

> gave the pharmacists improper inducements to dispense its generics over

> those of competitors, through higher Medicaid reimbursements. One such

> Apothecon generic is atenolol, a blood-pressure treatment, the person

> said.

>

> In private letters to prosecutors, Bristol-Myers Squibb lawyers have

> complained that the subpoenas it received were overly broad, people

> involved say.

> In addition to the federal investigation, there are parallel state

> probes of

> Bristol-Myers Squibb and other drug makers under way in Florida, Texas

> and California. Those are most likely to result in civil charges against

> drug

> companies, but prosecutors are not ruling out criminal indictments

> against

> doctors involved and industry executives. " We have a criminal

> investigation, which may well result in indictments against

> individuals, " said

> Mark Schlein, a prosecutor in Florida's attorney general office.

> " ly, if

> we do our jobs, we like to think that these individuals will provide us

> with

> information to go on up the chain. "

>

> Among the Bristol-Myers Squibb drugs being scrutinized is Etopophos, an

> injectible medication used to treat testicular and lung cancer and

> non-Hodgkin's lymphomas. Invoices obtained under subpoena by state

> prosecutors and provided to federal investigators in Boston show that

> some oncologists received large amounts of free doses of the drug,

> described as " samples, " as part of larger orders of Bristol-Myers

> drugs.

> Prosecutors want to know if such deals were common and whether the

> company urged the doctors to bill Medicare or Medicaid for the free

> goods they received.

>

> Other invoices obtained by state prosecutors show Oncology Therapeutics

> Network giving doctors dozens of free " Cytoguards " -- small $3 devices

> that prevent spilling of intravenous-administered treatments -- with

> their

> monthly orders, a marketing move that prosecutors suspect may have been

> a disguised kickback.

>

> As of 4 p.m. in broadly higher New York Stock Exchange composite

> trading Monday, Bristol-Myers rose $1.66 to $63.60.

>

> Write to S. Cloud at david.cloud@...

>

>

> ~~~~~~~

>

>

> Bristol-Myers Faces US Probe Over Drug Marketing, WSJ Says

>

> (Bloomberg) -- Bristol Myers-Squibb Co., the No. 1 manufacturer of cancer

> medicines, was sent grand-jury subpoenas by federal prosecutors seeking

> information on the marketing of its anticancer drugs and other products,

> the Wall Street Journal reported.

>

> The investigation into Bristol Myers-Squibb is similar to an inquiry

> involving Abbott Laboratories' joint venture with Takeda Chemical

> Industries Ltd. The companies' marketing efforts for oncology treatments

> and other drugs administered by doctors are coming under scrutiny by

> federal prosecutors in Boston as part of a long-running federal-state

probe

> of industry practices.

>

> Investigators are looking at whether Bristol Myers-Squibb provided

> oncologists with inducements, such as free drugs and devices, in exchange

> for purchases of other Bristol drugs, the paper reported, citing people

> involved as saying.

>

> The New York-based company is also being assessed as to whether it

> encouraged doctors to improperly bill Medicare, the federal health program

> for the elderly, and Medicaid, a federal- state program serving the

> low-income and disabled. Bristol Myers- Squibb spokesman Donohue

> said the company is cooperating fully with the inquiry.

>

> (WSJ 2/27)

>

> Feb/27/2001 0:21 ET

>

>