Tuesday, October 18, 2005

A few bad apples

Today's big AIDS story is about the settlement and fine of Serono Labs for fraudulent marketing of Serostim. The AP and Reuters reports seem to provide the basis for everyone else's story, although there is some variation among the reports. Here's a sample:

AIDS Drug Maker to Pay $704M in Settlement (ABC News)
Firm admits AIDS-drug fraud (Billings Gazette)
U.S. Says Serono to Plead Guilty, Pay $704 Mln (Reuters)
AIDS Drug Maker to Pay $700M in Settlement (Associated Press via Yahoo)
Drugmaker to pay $704M fine in health care fraud (USA Today)
Swiss firm to plead guilty in AIDS case (CNN Money)
Settlement in Marketing of a Drug for AIDS (New York Times)
U.S.: Serono 'guilty' on AIDS drug (CNN World Business)
Maker of AIDS Drug Fined for Kickbacks (Washington Post)

There are, no doubt, more stories, but you get the picture. It's either the second or third largest (depending on your source) case of its type ever prosecuted. It's a whistleblower case, so five whistleblowers get to divvy up a $51 (or $52) million reward.

It's also about kickbacks and making deals with doctors to prescribe the drug unnecessarily in return for a trip to France. It's about creating a medical device that never got any review by the FDA (to prove that it worked) to "diagnose" AIDS wasting in people who didn't need the drug.

Some former company executives have been indicted, the company has paid both civil and criminal fines, but the U. S. Attorney in the case has not revealed whether he will be pursuing indictments of the doctors who falsely prescribed the drug. Serostim and all other Serono products will stay on the market, but one branch of Serono (not the whole company) will be barred from participating in federal programs for five years.

Serostim is not on the formulary for the Texas HIV Medication Program. It is, however, on the Texas Medicaid formulary. At the time it was added to Medicaid, Serostim was listed as a drug that required prior authorization because of its expense and the rarity with which it was expected to be needed. There is no information about whether any Texas doctors or sales reps were involved in the scam.

Serono blames the whole thing on a few bad apples.

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