Swiss biotechnology company Serono has agreed to plead guilty and pay a hefty fine in a US lawsuit centring on illegal promotion of its human growth hormone product, Serostim (somatropin), to treat muscle wasting in patients with AIDS.

The $704 million dollar fine includes $137 million to settle a criminal lawsuit brought by the US Department of Justice, and $567 million to set aside civil charges that it knowingly encouraged the submission of fraudulent claims for Serostim reimbursement under government health programmes.

“This is the third largest healthcare fraud recovery in the Department of Justice’s history, and it is the largest settlement involving losses to the federal and state funded Medicaid program,” said US Attorney General Alberto Gonzales at a press conference announcing the settlement yesterday.

Serono was accused of aggressively promoting Serostim at a times when advances in antiretroviral therapy, and particularly the use of cocktails of drugs, led to a dramatic reduction in the number of HIV patients going on to develop full-blown AIDS, and with it a reduction in cases of wasting. The Swiss company developed a diagnostic test, known as body cell mass, which allowed it to diagnose AIDS wasting even in patients who had not lost any body weight, according to the Department of Justice. US Attorney Michael Sullivan, who prosecuted the case, told the press conference that 85% of prescriptions written for Serostim were unwarranted.

In April 2005, Serono announced that it had taken a $725 million provision to cover the settlement and related costs [[22/04/05b]]. The four-year investigation hit the headlines earlier this year after a former Serono employee was accused of bribing doctors with an all-expenses-paid trip to France in return for writing prescriptions for Serostim [[17/12/04b]].

“We are pleased to put the matter behind us,” said Thomas Gunning, vice president and general counsel of Serono US.