California joins whistleblower suit against BMS
California Insurance Commissioner Dave Jones has decided to intervene in a "qui tam" (whistleblower) lawsuit against Bristol Myers-Squibb (BMS). The lawsuit is the largest health insurance fraud case ever pursued by a California state agency.
Former BMS employees filed a whistleblower action under seal in Superior Court in Los Angeles alleging that BMS bribed doctors to prescribe drugs. The lawsuit alleges that the company provided illegal kickbacks to doctors in order to increase the company's pharmaceutical sales in California.
The Commissioner is seeking monetary penalties and the disgorgement of millions of dollars in unlawful profits the company made as a result of kickbacks, plus treble damages. The alleged kickback scheme ultimately came at the expense of the private health insurance industry, which paid for the drugs, and California consumers.
"This sort of fraud has long plagued our health insurance system," Jones said. "Besides the obvious and deplorable ethical violations in such cases, healthcare fraud also leads to higher premiums for consumers and an unnecessary and unjust increase in healthcare costs. … We are uncertain whether the kickback scheme is still occurring. If discovery discloses that violations are continuing, the department will seek an injunction and penalties to address those violations.”
The case was initially filed by former BMS employees Michael Wilson and Lucius and Eve Allen, all of whom are represented by the law firm of Waters Kraus & Paul in Los Angeles. The suit alleges that BMS instructed its sales representatives to court doctors with sports tickets, meals, honoraria, trips and gifts to induce them to prescribe BMS drugs.
The complaint alleges that the result of the scheme was to increase prescriptions of BMS drugs, which private health insurers (and, ultimately, the policy holding public) in California ended up paying for. It is believed that insurance companies in California have spent more than $3.5 billion to cover the costs of the drugs the lawsuit claims BMS sought to promote with its kickback scheme.
"We need to be sure that doctors are prescribing drugs because those drugs are best for their patients and not because a pharmaceutical company provided doctors with trips and kickbacks," Jones said. "These illegal practices drive up the cost of health insurance for millions of Californians. Besides the illegality involved in this case, such actions are plainly and simply unjust, and I will seek to stop such unlawful practices."
The case will be decided by a jury in Los Angeles.
Former BMS employees filed a whistleblower action under seal in Superior Court in Los Angeles alleging that BMS bribed doctors to prescribe drugs. The lawsuit alleges that the company provided illegal kickbacks to doctors in order to increase the company's pharmaceutical sales in California.
The Commissioner is seeking monetary penalties and the disgorgement of millions of dollars in unlawful profits the company made as a result of kickbacks, plus treble damages. The alleged kickback scheme ultimately came at the expense of the private health insurance industry, which paid for the drugs, and California consumers.
"This sort of fraud has long plagued our health insurance system," Jones said. "Besides the obvious and deplorable ethical violations in such cases, healthcare fraud also leads to higher premiums for consumers and an unnecessary and unjust increase in healthcare costs. … We are uncertain whether the kickback scheme is still occurring. If discovery discloses that violations are continuing, the department will seek an injunction and penalties to address those violations.”
The case was initially filed by former BMS employees Michael Wilson and Lucius and Eve Allen, all of whom are represented by the law firm of Waters Kraus & Paul in Los Angeles. The suit alleges that BMS instructed its sales representatives to court doctors with sports tickets, meals, honoraria, trips and gifts to induce them to prescribe BMS drugs.
The complaint alleges that the result of the scheme was to increase prescriptions of BMS drugs, which private health insurers (and, ultimately, the policy holding public) in California ended up paying for. It is believed that insurance companies in California have spent more than $3.5 billion to cover the costs of the drugs the lawsuit claims BMS sought to promote with its kickback scheme.
"We need to be sure that doctors are prescribing drugs because those drugs are best for their patients and not because a pharmaceutical company provided doctors with trips and kickbacks," Jones said. "These illegal practices drive up the cost of health insurance for millions of Californians. Besides the illegality involved in this case, such actions are plainly and simply unjust, and I will seek to stop such unlawful practices."
The case will be decided by a jury in Los Angeles.