Swiss drug maker Serono will pay more than $700 million to settle federal charges that it illegally marketed its AIDS drug Serostim by developing a fraudulent medical test to increase demand for the drug and sent doctors on all-expenses paid vacations to France in exchange for writing prescriptions.
The settlement marks the third largest healthcare fraud recovery in the history of the U.S. Justice Department and is the largest settlement involving losses to the federal- and state-funded Medicaid program.
“This settlement concludes a four-year government investigation into commercial practices related to Serostim, and we are pleased to put the matter behind us,” said Thomas Gunning, vice president and general counsel, Serono U.S., in a statement. “The activities described in the settlement were confined to one unit in our U.S. operations and cover a brief period in our history. Serono takes compliance issues very seriously and has a rigorous compliance program to ensure that its employees meet the highest ethical standards. We now look forward to continuing to focus and devote our energies on our core mission of developing treatments to meet unmet medical needs.”