June 5, 2003
"Drug diversion schemes are a nationwide problem that not only robs the city, the state and federal government of millions of dollars each year but places the public in jeopardy," said New York Attorney General Eliot Spitzer. According to estimates by Spitzer's office, fraudulent sales of Serostim and other prescription drugs amounted to 10 percent of the state's $3 billion Medicaid drug tab last year. "If you were to make a list of the top 10 diverted drugs, Serostim would be at the top and it would make up 40 to 50 percent of the cost of all diverted drugs," said Ken Karp, an investigator with Spitzer's Medicaid fraud control unit.
Despite efforts by Serostim's maker and law enforcement to ensure it only goes to patients who need it, the drug remains plentiful in the city's gyms. "Every topnotch bodybuilder in the world uses it," said Dave Palumbo, editor-in-chief of the muscle magazine RxMuscle and a champion bodybuilder. And AIDS patients are often the suppliers, according to some of New York's leading AIDS doctors. One Manhattan physician told of an AIDS patient who sold his supply to pay the rent.
Investigators with the US attorney's office in Boston are questioning whether the maker of Serostim, Swiss-based Serono Laboratories, promoted the drug for AIDS patients who were losing weight but may not have been experiencing AIDS wasting, which causes the body to consume muscle and organ tissue rather than stored fat. In response to complaints that doctors were incorrectly prescribing the drug, the New York Health Department began requiring physicians last year to get state approval prior to prescribing it. To counter fraud, Serono revamped its distribution network to track the drug from the warehouse to the patient, resulting in a drop in sales from $124 million in 2001 to $95 million in 2002.