By Robert Schmidt and Beth Jinks
March 27, 2008
Otsuka Pharmaceutical Co. agreed to pay $4 million to resolve U.S. allegations it marketed the schizophrenia drug Abilify for off-label uses in cahoots with Bristol-Myers Squibb Co., which settled in September.
The Justice Department accused New York-based Bristol-Myers and Otsuka American Pharmaceutical Inc., a U.S. subsidiary of the closely held Japanese drugmaker which invented Abilify, of promoting the antipsychotic for use in children, and as a remedy for dementia, without regulator approval.
Use in children wasn’t approved by the U.S. Food and Drug Administration at the time, and the drug is required to carry the most severe safety warning, a so-called black box, for use in dementia-related psychosis.
In September, Bristol-Myers completed an agreement to pay $515 million to settle U.S. allegations it overcharged the government for drugs and promoted medicines including Abilify for unapproved uses. Bristol-Myers directed its sales force to visit child psychiatrists and nursing homes, the Justice Department said in September. Otsuka’s sales force was “led primarily by Bristol-Myers sales managers,” the department said today.
Otsuka will pay the U.S. government about $2.3 million and the remainder to states’ Medicaid programs, the company said in a statement. It agreed to a corporate integrity agreement, without specifying the length of the compliance and monitoring pledged.
Bristol-Myers also agreed to a five-year corporate integrity agreement that requires the company to maintain compliance programs to monitor business practices. It avoided criminal charges.
The U.S. investigation of Bristol-Myers involved more than 50 medicines. The company was accused of inflating prices used by the government to set reimbursement rates for some drugs, and improper promotional activities for others.