The company will pay a $136 million criminal fine and $567 million to settle civil liabilities. The resolution also ensures that the US Medicaid programs who paid any claims for Serostim during the time frame of the investigation, 1996 through 2004, will recoup the money paid.
“Serono abused the system of testing and approval, and put its desire to sell more drugs above the interest of patients,” said US Attorney General Alberto Gonzales. “The settlement will repay with interest the losses to federal and state Medicaid programs incurred by Serono’s conduct.”
In 1996, the FDA granted accelerated approval for Serono’s drug Serostim solely for use in treating AIDS wasting, which at the time was the leading cause of death among AIDS patients.
Serostim came on the market at the same time as protease inhibitor drugs. These drugs, when used in combination with one another as an “AIDS cocktail,” dramatically curtailed the proliferation of the AIDS virus. As a result, the incidence and prevalence of AIDS wasting began to markedly decline among those patients taking the cocktail drugs.
In turn, the demand for Serostim began to drop significantly immediately following its launch in the fall of 1996.
According to the US Justice Department, Serono LABS then began engaging in a “multifaceted marketing and sales campaign to redefine AIDS wasting and create a market for Serostim.”