Bristol-Myers Squibb Co. agreed to pay $499 million to settle federal investigations into whether the company played a role in a pricing scheme that led insurers and government agencies to overpay for drugs. The company reduced its profit forecast to reflect the charges.
The New York-based drug maker entered an agreement in principle with the Justice Department and the U.S. attorney in Massachusetts to pay the settlement and avoid civil and criminal charges.
The company also will enter a corporate integrity agreement with the Department of Health and Human Services' inspector general. The agreement must still get final approval from the Justice Department.
Bristol-Myers spokesman Jeff McDonald said the probe covered "a number" of the company's products introduced before 2006, including the anti-psychotic treatment Abilify, as well as some drugs it no longer markets.
The company expects the Justice Department review to take a couple of months.
Attorneys general of several states and a number of counties in New York charged that Bristol-Myers and several other drug companies caused the reported average wholesale prices of their drugs to be inflated -- leading government programs and insurers to overpay since reimbursement rates were based on those lists.
Bristol-Myers products on the wholesale price list included the blood thinner Plavix, blood-pressure drug Avapro, cancer treatment Taxol and cholesterol-lowering drug Pravachol. Shares of Bristol-Myers rose 28 cents Thursday to $26.05.