AEGiS-WSJ: Serono Faces Intensified Scrutiny On Marketing of Its AIDS Drug

Important note: Information in this article was accurate in 2004. The state of the art may have changed since the publication date.

Serono Faces Intensified Scrutiny On Marketing of Its AIDS Drug

Wall Street Journal - April 15, 2004
Christopher Windham, Staff Reporter of The Wall Street Journal

Federal and state officials are intensifying their investigations into Serono SA's marketing practices of an AIDS drug, several people familiar with the matter said.

Serono's growth hormone Serostim is approved to treat AIDS-associated wasting. The government Medicaid program pays for most of the cost of the drug used in the U.S.

Scrutiny into the drug's marketing began several years ago. Serono, a Swiss biotech company, has said the U.S. Attorney in Boston asked it in 2001 for roughly a decade's worth of documents pertaining to Serostim. In 2002, the company received similar subpoenas from authorities in California, Florida, Maryland and New York.

Current criminal and civil investigations on federal and state levels appear to be focusing on whether Serono's U.S. affiliate violated federal and state False Claims Acts or antikickback laws, according to the people familiar with the matter. The laws make it illegal for drug companies to offer inducements to doctors to prescribe a particular drug paid for by the government.

HIV specialist Howard Grossman said he testified before a federal grand jury in Boston last month about his business dealings with Serono. The Justice Department also asked him for all documents pertaining to Serono, which included telephone records and tax forms, he said.

Dr. Grossman, a New York physician, said he was asked whether he accepted a trip from Serono to attend an AIDS conference in Cannes, France, in 1999. The alleged trip was to include a business-class flight, hotel accommodations and registration fee. Dr. Grossman said he testified that he didn't remember receiving such an offer and was in New York giving lectures at the time.

The U.S. Attorney's office in Boston had already questioned Dr. Grossman last year about his motives for writing Serostim prescriptions, he said. Dr. Grossman said he was also shown Serono materials that said doctors invited to the conference are to deliver lectures at future AIDS meetings. "I felt like I was really under attack," said Dr. Grossman, who said he writes about six Serostim prescriptions a month.

Danielle Milano did attend the AIDS conference in Cannes, but not as Serono's guest, she said. Dr. Milano, an HIV specialist in New York, was questioned after receiving a subpoena from the U.S. Attorney in Boston in March 2003. She was asked to bring any documents related to Serono as well. Dr. Milano said she presented receipts to the Justice Department that showed she paid for the hotel and plane ticket to the conference.

Federal investigators have also subpoenaed pharmacy contracts, invoices and marketing materials pertaining to Serostim, two pharmacies said. A key issue is whether Serono gave pharmacies rebates or discounts that weren't reported as required to Medicaid.

In 2002, the Boston U.S. Attorney's office subpoenaed all records related to Serostim from Echo Drugs, one of New York's largest providers of AIDS drugs.

Serono doesn't comment on legal matters, says Lisa Ellen, a Serono spokeswoman. The U.S. Attorney's office in Boston said it doesn't confirm or deny investigations.

Write to Christopher Windham at christopher.windham@wsj.com

040415
WJ040403

AEGiS is a 501(c)3, not-for-profit, tax-exempt, educational corporation. AEGiS is made possible through unrestricted funding from the Elton John AIDS Foundation, National Library of Medicine, AIDS Walk of Orange County, and donations from users like you.

Always watch for outdated information. This article first appeared in 2004. This material is designed to support, not replace, the relationship that exists between you and your doctor.

AEGiS presents published material, reprinted with permission and neither endorses nor opposes any material. All information contained on this website, including information relating to health conditions, products, and treatments, is for informational purposes only. It is often presented in summary or aggregate form. It is not meant to be a substitute for the advice provided by your own physician or other medical professionals. Always discuss treatment options with a doctor who specializes in treating HIV.

Copyright ©1980, 2004. AEGiS. All materials appearing on AEGiS are protected by copyright as a collective work or compilation under U.S. copyright and other laws and are the property of AEGiS, or the party credited as the provider of the content. .