Bristol-Myers Squibb says it will pay $499 million to bring to an end investigations by the US government into its previous sales and marketing practices.
The company noted that it has reached an agreement, in principle, with the US Department of Justice and the Office of the Attorney for the District of Massachusetts to "settle several investigations," which began several years ago, involving its drug pricing, as well as sales and marketing activities.
The tentative settlement provides for a civil resolution and in return there would be no criminal charges brought against B-MS. As part of the pact, the firm would also enter into a corporate integrity agreement with the Office of the Inspector General and the US Department of Health and Human Services.
As a result of the deal, B-MS has increased its reserves for the investigations by $353 million, to a total of $499 million, a figure it will record in the fourth quarter and it is also taking a pretax charge of $220 million for previously disclosed debt restructuring. As a result of the charges, the company lowered its 2006 outlook for net earnings from continuing operations to between $0.72-$0.77 per share from a previous estimate of $0.97-$1.02.
The company noted that the agreement was unrelated to a 2005 settlement with the US Attorney’s Office in New Jersey over its accounting practices. Because of that earlier settlement, which cost the firm some $800 million, B-MS has been operating under a deferred prosecution agreement.