Serono Discussing Settlement Details of Federal Investigation Into Price, Marketing of AIDS-Related Drug Serostim
September 22, 2005
The Swiss biotechnology company Serono and federal and state officials are discussing details of an agreement that could settle a federal Department of Justice investigation into the company's sales and pricing practices of its drug Serostim, which is used to treat AIDS-related wasting, the Wall Street Journal reports. According to people familiar with the agreement, which is close to being finalized, Serono or one of its units would admit wrongdoing and pay fines of about $700 million, the Journal reports (Armstrong/Zimmerman, Wall Street Journal, 9/22). Serono in April said it would pay up to $725 million after DOJ indicted four former Serono executives for allegedly bribing physicians to prescribe Serostim, which many HIV/AIDS patients receive through joint federal-state Medicaid programs (Kaiser Daily HIV/AIDS Report, 8/4). According to the Journal, the people familiar with the settlement said Serono probably will agree to pay the federal government a criminal fine of about $145 million and a civil fine of more than $300 million, while state governments likely would split an additional $250 million civil fine. In addition, at least five former Serono employees are expected to receive as much as $70 million of the settlement for their roles as whistleblowers. The agreement also likely will allow Serono to continue to be paid for its products under Medicaid (Wall Street Journal, 9/22).
This article was provided by Henry J. Kaiser Family Foundation. It is a part of the publication Kaiser Daily HIV/AIDS Report. Visit the Kaiser Family Foundation's website to find out more about their activities, publications and services.