Bristol-Myers Squibb anticipates a tentative agreement with federal authorities settling several investigations involving pharmaceutical pricing, as well as sales and marketing practices, to be finalized by the Department of Justice within three to six months, the firm said.

Under an "agreement in principle" with the Boston U.S. Attorney's Office, Bristol would pay $499 million in civil penalties while avoiding any criminal charges.

The company would also enter into a corporate integrity agreement with the HHS Office of Inspector General as part of the deal, according to Bristol. Bristol said it is currently in discussions with OIG, and that the CIA could include training and monitoring programs, as well as revisions to the firm's code of conduct.

The agreement would not impact ongoing federal and state litigation in several states and other jurisdictions related to average wholesale prices.

In conjunction with the announcement, Bristol increased its litigation reserves by $353 million. According to SEC documents, the firm previously reserved $146 million in connection with the investigation, which represented the company's minimum expected loss related to the lawsuits.

Last year proved to be a difficult one for Bristol, topped by Apotex's "at risk" launch of generic Plavix (clopidogrel) and the subsequent termination of CEO Peter Dolan (¹ Also see "Bristol Interim CEO Pick Fuels Acquisition Rumors, Complicating Search" - Pink Sheet, 18 September, 2006., p. 3). Although some analysts have speculated that the company could become a takeover target, interim chief executive Jim Cornelius has since said that Bristol is not for sale.

In October, Bristol announced that the New Jersey U.S. Attorney's Office had expanded its investigation of the company to include an assessment of whether the proposed generic Plavix settlement with Apotex violated securities law under terms of a 2004 consent decree. The DoJ is also conducting a criminal investigation in the matter.

In 2005, Bristol settled charges related to "channel stuffing" wholesaler inventories. As part of that settlement, the firm is under a deferred prosecution agreement that expires next year.

- Christopher Hollis

Bristol To Pay $500 Million Civil Fine Under Tentative Deal With U.S. Attorney

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