Officials intensify Serono drug probe
April 17 2004 12:00 AM ET
State and federal officials have intensified their probe of drugmaker Serono over the company's marketing practices of its AIDS-related wasting treatment, Serostim, which is commonly sold on the black market to bodybuilders to increase muscle mass, The Wall Street Journal reports. Many AIDS patients receive the drug through the Medicaid program. Serono in 2001 received a subpoena from the U.S. attorney's office in Boston requesting 10 years' worth of documents pertaining to marketing and sales of the drug, particularly Medicaid billing for the medication. Similar inquiries are under way in California, Florida, and New York.
The investigations are now also focusing on whether the company violated federal and state false claims acts and antikickback laws that prohibit companies from offering incentives to doctors to prescribe a drug paid for through government programs, the Journal quotes sources close to the company as saying. Federal officials also have subpoenaed pharmacy contracts, marketing documents, and invoices to see whether the Switzerland-based company gave pharmacies unreported rebates or discounts on the medication. Serono spokeswoman Lisa Ellen told the Journal that the company doesn't comment on legal matters. The U.S. attorney's office in Boston would neither confirm nor deny the investigations, according to the newspaper.
Serostim is prescribed to about 5,000 U.S. AIDS patients each year to combat AIDS-related wasting and to boost body muscle mass. But the drug is commonly sold illegally to bodybuilders for $1,000 to $2,000 for a one-week supply. The prescription medication costs AIDS patients about $20,000 for a three-month supply. The drug's high price tag makes it a common target for drug counterfeiters. Serono has issued public warnings about counterfeit batches of Serostim reaching the consumer market at least three times since 2001.