December 3, 2021

Volume XI, Number 337

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Whistleblower Reports Bristol-Myers Squibb Medicaid Drug Rebate Fraud, Resulting in $75 Million Recovery for The U.S. Government and States

APRIL 1, 2021, The United States Department of Justice settled a case against Bristol-Myers Squibb (“BMS”), a global biopharmaceutical company. To resolve allegations that BMS knowingly underpaid drug rebates owed under the Medicaid Drug Rebate Program (MDRP), BMS has agreed to pay the United States and named participating states $75 Million plus interest.

According to the allegations, the fraud scheme occurred by BMS underreporting the Average Manufacturer Prices (AMPs) for several of its drugs by inaccurately reducing reported AMPs for wholesaler paid service fees. Further, the lawsuit accused BMS of excluding the additional AMP value received following price appreciation provisions stated in BMS’s contracts with wholesalers. These improper and misleading reports resulted in the alleged underpayment of quarterly rebates owed to states, causing the United States to be overcharged in its payments to the associated states for the MDRP.

The MDRP, a program with approximately 600 participating drug manufacturers, assists in offsetting the Federal and state costs of the majority of outpatient prescription drugs prescribed to Medicaid patients. The MDRP is an important part of ensuring all enrollees have access to prescriptions with little cost. Fraudulent manipulation of the Medicaid Rebate Program undermines the very purpose of the program. The program is designed to help the Medicaid program remain solvent. The government agrees to pay for a manufacturer’s drugs that are prescribed to patients if the drug company agrees to provide the government rebates on their drugs. The way it works is complex, but the purpose is clear: ensuring everyone has access to their prescription drugs.

This settlement resolves a qui tam lawsuit brought by a whistleblower under the False Claims Act (FCA). Coming forward requires the courage to challenge wrongdoing and injustice. This whistleblower’s, also known as a “relator,” commitment to protecting the programs set in place to ensure all have access to prescription drugs, in addition to the commitment to maintaining the integrity of the MDRP, entitles them to a share in the recovery of the successful qui tam lawsuit. Under the False Claims Act, a whistleblower is entitled to between 15% and 25% of the settlement. The Department of Justice needs whistleblowers to report Healthcare Fraud to assist the government in ensuring that all those who need medical assistance are able to receive it and that those committing fraudulent actions are held accountable.

© 2021 by Tycko & Zavareei LLPNational Law Review, Volume XI, Number 102
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About this Author

Jonathan K. Tycko leads the Whistleblower Practice Group of Tycko & Zavareei LLP

In recent years, the laws of the United States have undergone a whistleblower revolution. Federal and state governments now offer substantial monetary awards to individuals who come forward with information about fraud on government programs, tax fraud, securities fraud, and fraud involving the banking industry. Whistleblowers also now have important legal protections, designed to prevent retaliation and blacklisting.

The law firm of Tycko & Zavareei LLP works on the cutting edge of this whistleblower revolution, taking on even the most complex and confidential whistleblower...

202-973-0900
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