Drugmaker to pay $704M fine in health care fraud

USA TODAY, October, 2005 by Donna Leinwand

WASHINGTON -- Serono Labs agreed Monday to pay $704 million in fines to the federal government and plead guilty to fraud charges for illegally inducing doctors to prescribe its AIDS drug, Serostim.

The fine is the third-largest health care fraud settlement for the Justice Department and will be used to reimburse federal and state-funded health programs, which paid for unnecessary prescriptions of Serostim, U.S. Attorney General Alberto Gonzales said in a statement. Medicaid paid more than $600 million for Serostim prescriptions nationwide from 1996 through 2004, the Justice Department said.

Serono, a Swiss drugmaker whose U.S. headquarters are in Massachusetts, has also agreed to a corporate compliance plan that includes internal audits and government monitoring.

"After four years of the investigation, we thought it was in our best interest to put the matter behind us," Serono USA general counsel Thomas Gunning said.

Although the government has barred ...