Bristol-Myers Squibb To Pay City $7.5M in Damages

The pharmaceutical company Bristol-Myers Squibb agreed yesterday to pay New York City $7.5 million in damages stemming from allegations of Medicaid fraud.

The company also agreed to pay $40 million to New York State under the deal, which was negotiated by the city and by the state's attorney general, Andrew Cuomo.

The agreement stems from claims made in 2004, when the city filed lawsuits against 44 pharmaceutical companies for allegedly inflating the average wholesale price of their drugs. As a result, the city alleged that millions of dollars of charges were added to its Medicaid budget.

The suits sought to "rein in the widespread fraudulent practices that unlawfully inflate the City's Medicaid costs," the city's corporation counsel, Michael Cardozo, said in a statement announcing the settlement. "We are pleased at the successful resolution reached with one of the defendants, and hope to reach similarly successful resolutions with others."