Health Care Fraud—AIDS Drugs

The Swiss corporation Serono has agreed to pay a US$136.9 million criminal fine in connection with “illegal schemes to promote, market and sell its drug, Serostim.”^[1] Serostim is used to treat AIDS wasting, which is a condition involving the involuntary loss of weight in AIDS patients.^[2] In addition to the criminal fine, Serono will pay US$567 million to settle civil claims.^[3]

Serono pleaded guilty to conspiring with medical device manufacturer RJL Sciences to market “bioelectrial impedance analysis (BIA) computer software packages for use in calculating body cell mass and diagnosing AIDS wasting.”^[4] The device has not been approved by the Food and Drug Administration for these uses, and Serono Labs conspired with RJL to increase the market for the devices/software in order to increase the market for Serostim.^[5] Serono employees also administered BIA test to patients “to induce doctors to prescribe Serostim and to get Medicaid agencies and other payers to reimburse for the drug.”

Finally, “Serono Labs agreed to plead guilty to offering physicians an all expense-paid trip to a medical conference in Cannes, France in return for the doctors writing up to 30 new prescriptions of Serostim, which cost [US]$21,000 per course of treatment, for a total value of [US]$630,000 per doctor.”^[6]

As part of the plea agreement, Serono will be excluded from all federal health care programs for at least the next five years, and the corporation will be subject to a “stringent Corporate Integrity Agreement” during that time period.^[7]

Health Care Fraud
We have previously discussed health care fraud here.

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[1] US Department of Justice, Press Release: Serono to Pay [US]$704 Million for the Illegal Marketing of AIDS Drug, Oct. 17, 2005, available here.
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] Id.