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.