Pharmaceutical manufacturers Serono Laboratories, Inc., EMD Serono, Inc., Merck Serono S.A., and Ares Trading S.A. have agreed to pay $44.3 million to settle a whistleblower lawsuit alleging the drugmakers of violating the False Claims Act by paying kickbacks to doctors in order to market their multiple sclerosis treatment Rebif. The whistleblower lawsuit was filed by Tim Amato, a regional business director who initially complained internally about doctors being paid as high as $30,000 for actively prescribing Rebif. In his complaints, Mr. Amato detailed how Merck Serono attempted to conceal the bribes by ‘funneling’ payments to doctors through the Consortium of Multiple Sclerosis Centers. It is alleged that Serono Laboratories also paid doctors to attend consultant, marketing and advisory board meetings at pricey resorts.
The settlement represents another victory for the Health Care Fraud Prevention and Enforcement Team (HEAT), which is a partnership between the Justice Department and the Department of Health and Human Services (HHS) established in 2009 to bolster the government’s efforts in preventing Medicare and Medicaid fraud.
Mr. Amato was fired after bringing his complaints to the attention of company management. He then filed a wrongful termination lawsuit followed shortly thereafter by a qui tam lawsuit in 2005. This is not Merck Serono’s first major infraction. Serono and some of its United States subsidiaries paid $704 million in 2005 to resolve criminal and civil charges alleging that the drug maker illegally marketed their Serostim AIDS medication.