By Peter Loftus Of DOW JONES NEWSWIRES California's insurance commissioner said Friday his office would take the lead in a lawsuit accusing Bristol-Myers Squibb Co. (BMY) of paying illegal kickbacks to doctors to induce them to prescribe the company's drugs. The lawsuit had been filed in state court by three former Bristol-Myers employees who claim the New York-based company told its sales representatives to "court doctors with sports tickets, fancy meals, honoraria, all-expense-paid trips, and gifts to induce them to prescribe" Bristol drugs, according to the press release issued Friday by Dave Jones, the state's insurance commissioner. "Bristol-Myers Squibb believes this lawsuit has no merit and the company will defend itself vigorously," said spokeswoman Laura Hortas. Jones said insurance companies in California have spent more than $3.5 billion to cover the costs of the drugs the lawsuit claims Bristol sought to promote with its kickback scheme. Bristol markets the popular Plavix anti-clotting drug and antipsychotic Abilify. The lawsuit was originally filed under seal by the former Bristol employees under laws designed to encourage would-be whistleblowers to come forward with information about allegations of fraud. Interventions in such cases by state or federal authorities often lead to monetary settlements with drug companies to resolve the allegations, and the whistleblowers are entitled to a percentage of the recovery. One of the plaintiffs in the lawsuit is Lucius Allen, who played basketball for UCLA and in the NBA in the 1960s and 1970s, before he joined Bristol as a cardiovascular metabolic risk specialist, according to the lawsuit. Several large drug makers have been hit with similar allegations by state and federal authorities in recent years. Last year, the U.S. Department of Justice sued Johnson & Johnson (JNJ), accusing the company of paying illegal kickbacks to pharmacy-services provider Omnicare Inc. (OCR) to encourage use of J&J drugs. Bristol shares rose 19 cents to $25.62 Friday. -By Peter Loftus, Dow Jones Newswires; +1-215-982-5581; peter.loftus@dowjones.com
