Schering-Plough Corp., the US pharmaceutical manufacturer perhaps best known for its anti-allergy medication Claritin, has agreed to pay US$435 million in fines to settle criminal and civil charges that it illegally promoted several drugs. The agreement was reached in late summer with the US Justice Department, which also alleged the New Jersey–based company had defrauded Medicaid, the government health care program.
The case marks the third time in the last 5 years that the company, which has annual sales of approximately US$10 billion, has reached a multi-million settlement with the government. One of the largest health care fines ever meted out by the Justice Department, it brings to US$1.3 billion the total paid by Schering-Plough as a result of the settlements.
According to the government, Schering-Plough engaged in illegal sales and marketing practices involving several cancer drugs by promoting their use for treatments not government-approved at the time. The allegations involved temozolomide (Temodar), which the company promoted for use in treating brain tumours and metastatic cancer, and Interferon alfa-2a (Intron A), for use in superficial bladder cancer and hepatitis C.
Although it's illegal for pharmaceuticals to promote drugs for non FDA-approved treatments, doctors have no such restrictions. According to the Justice Department, Schering-Plough paid doctors honoraria, directed prestigious and lucrative research grants their way, placed them on well-paying medical advisory boards and treated them to lavish dinners and other forms of entertainment in return for prescribing the drugs for the non-approved (off-label) usages.
The Justice Department also alleged that Schering-Plough defrauded Medicaid of US$4.3 million in the late 1990s by overcharging the agency, which provides health insurance to the poor and disabled, for the systemic antihistamine, Claritin RediTabs. Justice also said Schering-Plough underpaid rebates for the stomach ailment drug K-Dur (a potassium supplement).
While Schering-Plough said the off-label promotions were isolated incidents, the government said they were part of a national plan that the pharmaceutical company's staff were trained to enact.
"This settlement sends a clear message to the pharmaceutical industry,” said Paul McNulty, the US deputy attorney general, “that the Justice Department will not tolerate these deceptive and illegal marketing practices.”