Merck KGaA US units agree $44.3 million settlement with DoJ; Ranbaxy faces up to $1 billion fine?

Four US subsidiaries of German drug major Merck KGaA (MRK: DE) - Serono Laboratories, EMD Serono, Merck Serono and Ares Trading - have agreed to pay $44.3 million to resolve False Claims Act allegations in connection with the marketing of the multiple sclerosis drug Rebif (interferon beta-1b), the US Department of Justice revealed yesterday.

The settlement resolves allegations that Serono paid health care providers from the launch of Rebif in about January 2002 through December 2009, to induce them to promote or prescribe Rebif. Serono is alleged to have made payments to providers for hundreds of speaker training meetings and programs, as well as payments for attending consultant, marketing and advisory board meetings, all at upscale resorts and other locations. Serono’s actions allegedly resulted in the submission of false claims to federal health care programs including Medicare and Medicaid for the payment of Rebif, ie, claims that were tainted by kickbacks.

“It’s imperative that medical determinations are guided by a patient's needs, not tainted by illegal incentives or fraud,” said Tony West, Assistant Attorney General of the Civil Division. “We are committed to ensuring that the chronically ill and other vulnerable members in our communities who rely on Medicare and Medicaid programs receive the best possible care,” he added.