Serono and Serostim’s Corruption

This was first brough to light by Michael Mooney in 1999. It took years but Serono is now paying for this troublesome corporate decision. You can read the original article in 1999 here:

Ex-Serono executives acquitted in USA of bribing doctors


A federal grand jury has acquitted four former executives of Switzerland’s Serono, which has just been acquired by Merck KGaA, of charges that they illegally promoted its human growth hormone product, Serostim to treat muscle wasting in patients with AIDS.The US District Court jury in Boston set aside all charges brought in 2005 against the executives (Mary Stewart, John Bruens, Melissa Vaughan and Marc Sirockman) at Serono, which included conspiracy and giving doctors expenses-paid trips to Cannes, France for a medical conference in 1999 where they agreed to write up to 30 prescriptions for Serostim (somatropin), typically costing $21,000 for a 12-week treatment.At about the same time the US Food and Drug Administration approved the drug, protease inhibitors came on the market, making patients less prone to AIDS wasting. Demand for Serostim began to fall and at a meeting in Boston in March 1999, Mr Bruens and Ms Stewart told Mr Vaughn, Mr Sirockman and several other regional sales directors that they needed to “dig their way out” of a financial crisis, according to the indictment.Sales reps were required to identify the highest prescribing physicians in their region and then target them with free trips to boost prescriptions to $6 million in 6 days, prosecutors had claimed.”We believed this is a case that should not have been brought and the speed with which the jury returned its verdict (just three hours) confirmed our beliefs,” said Adam Hoffinger, an attorney for Ms Vaughn. He added that the trip was not offered in exchange for writing prescriptions for Serostim, noting that the defendants “had no intent to bribe any doctors, and they did not bribe any doctors. It was a legitimate medical conference.”Serono agreed a deal with the US Justice Department in October 2005 to plead guilty and pay $704 million to settle charges that it knowingly encouraged the submission of fraudulent claims for Serostim reimbursement under government health programmes.ReutersIt also agreed in 2005 to plead guilty to two criminal charges and to pay a $137 million fine resolving an investigation into how the company marketed the drug called Serostim, which was approved by the U.S. Food and Drug Administration in 1996.The drug was marketed in the United States by Serono Inc. of Rockland, Massachusetts.Also in 2005, Serono agreed to pay $567 million to settle civil charges that it knowingly caused the submission of false claims for Serostim that were not eligible for reimbursement under government health programs.>From 2005 Boston Globe:Some HIV/AIDS advocates have said the “bad blood” with Serono will not affect their position on new uses for Serostim, the Globe reports. However, “it’s clear this vocal and influential constituency, which often weighs in with regulators on AIDS drugs, now doesn’t trust Serono and will be skeptical of any new promises or clinical claims from the company,” according to the Globe


Mr. Vergel:

I am an attorney involved in the settlement of litigation against Serono. There’s about $2 million available to reimburse anyone who paid anything out of pocket for Serostim. Despite our best efforts to date to spread the word about the settlement and the availability of the money, very few have filed proofs of claim and most of the money is at risk of going unclaimed.

If you think you can help publicize this, please contact me. Your services would not be compensated, so you’d have to be interested in this as a pro bono project.

Richard W. Cohen
Lowey Dannenberg Bemporad Selinger & Cohen, P.C.
White Plains Plaza
One North Broadway, 5th Floor
White Plains, NY 10601
914-997-0500 (main line)
914-733-7239 (direct line)

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