Bristol-Myers Squibb has finalised a deal with the US government over its previous pricing and marketing practices which will see the New York-based drugmaker pay out more than $515 million to settle alleged wrongdoing in those areas.

B-MS announced that it has ironed out the details of the settlement, which was originally announced in December 2006 with the US Department of Justice and the Office of the United States Attorney for the District of Massachusetts resolving the investigations that began several years ago involving the company's drug pricing, and sales and marketing activities. The deal provides for a civil resolution and payment of $499 million, plus around $16 million in interest, the full amount of which has already been reserved, said B-MS.

The firm noted that it now faces no criminal charges and the settlement “will not affect its ongoing business with any customers, including the government”. B-MS has also signed up to a five-year “corporate integrity agreement” with the Office of the Inspector General of the Department of Health and Human Services that requires it to maintain compliance programmes to monitor business practices.

The DoJ had alleged that from 2000 through mid-2003, the firm and its Apothecon unit “knowingly and willfully paid illegal remuneration to physicians and other health care providers to induce them to purchase B-MS drugs”. This was done through paying out underhand consulting fees and expenses to doctors to participate in various programmes, some of which “involved travel to luxurious resorts”. The Government also claimed that, from 1994 through to 2001, Apothecon was involved in setting up illegal stocking allowances, market share payments and free goods “in order to induce its retail pharmacy and wholesaler customers to purchase its products”.

Another allegation was that B-MS promoted the schizophrenia drug Abilify (aripiprazole) for use in children for dementia-related psychosis, an unapproved indication and also misreported its best price for the antidepressant Serzone (nefazodone) under provisions in Medicaid. Over $187 million of the settlement will go to Medicaid participating states

US Attorney Michael Sullivan said that patients are entitled to “unbiased decision-making from their physicians and should not have to worry that financial inducements or lavish entertainment” have influenced their decisions. "Kickbacks are especially nefarious when they are used as part of a marketing effort to convince physicians to prescribe drugs for uses that the Food and Drug Administration has not determined to be safe and effective," he added.