AHF, Former Serono Employees in Dispute Over How to Divide Portion of Serono's $725 Million Settlement Regarding Federal Investigation
August 4, 2005
The AIDS Healthcare Foundation and a group of former employees for the Swiss biotechnology company Serono are in a dispute about how to divide a portion of the $725 million the company agreed to pay to settle a Department of Justice investigation into its sales and pricing practices, the Wall Street Journal reports (Armstrong, Wall Street Journal, 8/4). Serono in April said it would pay $725 million after DOJ had indicted four former Serono executives for allegedly bribing physicians to prescribe the AIDS wasting drug Serostim, which many HIV/AIDS patients receive through Medicaid programs (Kaiser Daily HIV/AIDS Report, 4/25). Several Serono employees in 2001 filed complaints against the company's practices, and AHF in 2003 filed a lawsuit against the company under the False Claims Act. The award to the former employees is expected to be between $70 million and $80 million, according to unnamed people familiar with the case, and AHF said it should get $3 million of the award for helping to block Medicaid reimbursement for Serostim. Generally, the government allows complainants to decide how to split awards. Although the former employees offered AHF $500,000, the foundation refused the amount, saying it would not accept a settlement of less than $1 million, according to people familiar with the case. AHF and the group of employees recently attempted to settle the dispute, but an attorney for some of the former employees on July 27 notified AHF that the employees were filing a motion to dismiss AHF's claim. That motion is pending in U.S. District Court in Boston. AHF said it would use the money to help people living with HIV/AIDS (Wall Street Journal, 8/4).
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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.