Bristol-Myers Squibb to settle US investigations for $499 million

Bristol-Myers Squibb reached an agreement in principle to pay $499 million to settle several US federal investigations into the company's drug pricing and marketing practices. The drugmaker noted that as a result of settlements with the US Department of Justice and the Office of the United States Attorney for the District of Massachusetts, it lowered its full-year financial guidance.

The deal will resolve federal charges that Bristol-Myers inflated wholesaler drug prices for some of its products, Bloomberg reports. Company spokesperson, Jeffrey Macdonald, noted that the agreement also includes the settlement of a probe into the off-label promotion for antipsychotic Abilify and "other current and divested products." Bristol-Myers added that there will be no criminal charges filed as part of its agreement reached on Thursday.

Commenting on the news, Les Funtleyder of Miller Tabak remarked that the proposed agreement "removes an overhang, but the lack of information makes it difficult for Wall Street to react," Bloomberg reports. He also stated that "these types of settlements happen all the time. The question for Bristol-Myers is who's going to be the CEO next year and/or if they'll be part of a consolidation," as reported in MarketWatch.

The company will increase its reserves for these investigations by $353 million in the fourth quarter, and also plans to record an unrelated charge of $220 million in the same period. As a result, Bristol-Myers lowered its full-year guidance to between $0.72 and $0.77 per share, from a previously announced range of $0.97 to $1.02.

The drugmaker is still facing a private class-action lawsuit involving drug prices, and has been sued by Attorneys General from several US states over its pricing practices, Bloomberg reports.

To read more Top Story articles, click here.