Swiss biotechnology firm Serono is facing a new and potentially costly class-action lawsuit in the USA over allegedly illegal marketing practices used for its AIDS wasting treatment Serostim.
Last year, Serono pleaded guilty and was ordered to pay $704 million to settle criminal and civil claims that it offered kickbacks to doctors in return for prescribing Serostim (somatropin), in what was the third-largest penalty ever imposed in the USA for healthcare fraud.
That settlement drove Serono to report a $106 million net loss last year, shortly after the biotechnology firm put itself up for sale. It has failed to find a buyer, with both Novartis and GlaxoSmithKline rumoured to have considered and rejected an offer.
The new lawsuit, filed in a Massachusetts court by lawfirm Hagens Berman Sobol and Shapiro, is piggybacked onto an earlier class action suit brought against Serono by the Government Employees Hospital Association in September 2005, which alleges that the company inflated the average wholesale prices of some of its products.
In the latest development, another plaintiff - District Council 37 Health & Security Plan Trust – maintains that Serono illegally promoted and marketed Serostim, and also alleges that Serono used improper and inappropriate sales and marketing practices to increase the sales of some of its other products.
Serono has said it will vigorously defend the lawsuit.