Serono labs pleads guilty to the illegal marketing of rHGH: company to pay $704 million global settlement

On 15 December 2005, the U.S. subsidiary, Serono Laboratories Inc pleaded guilty and was sentenced today in federal court on criminal charges in connection with several illegal schemes to promote, market and sell Serostim (rHGH, recombinant Human Growth Hormone), used in the US to treat AIDS wasting.

Serono agreed to pay a total of $704,000,000 to resolve the criminal charges and civil liabilities in connection with the several illegal schemes to promote, market and sell Serostim. This global resolution is the third largest health care fraud recovery by the United States.

This included a $136,935,000 criminal fine and $567,065,000 to settle civil liabilities. This global resolution ensures that the federal Medicaid program and each of the State Medicaid agencies who paid any claims for Serostim during the time frame of the investigation, 1996 through 2004, will recoup every dollar paid.

Serono pleaded guilty to introduce on the market bioelectrical impedance analysis (BIA) computer software packages for use in calculating body cell mass and diagnosing AIDS wasting prior to FDA approval, which would increase the market for Serostim. They also pleaded guilty to a second Conspiracy of paying illegal renumeration to doctors from March 1999, through December 1999. Ten physicians were offered an all expenses paid trip to a medical conference in Cannes in return for writing up to 30 new prescriptions of Serostim. The value of 30 scripts to be written by each doctor was $630,000, with a total value of approximately $6.3 million in sales.