Schering-Plough on Wednesday was sentenced to pay $435 million as part of a settlement with the Department of Justice over accusations that the company improperly marketed prescription drugs for "off-label" use and lied to the government about drug prices, the Washington Post reports (Washington Post, 1/18). DOJ alleged that Schering engaged in illegal sales and marketing programs for several cancer treatments, including the brain cancer drug Temodar and bladder cancer drug Intron A. DOJ alleged that Schering sales representatives illegally marketed the drugs for off-label uses. DOJ also alleged that the company paid "illegal remuneration" to doctors "to induce utilization of Temodar." Examples of this practice included placing doctors on medical advisory boards that primarily existed to pay doctors stipends and provide entertainment. The company also awarded potentially prestigious and lucrative clinical studies to doctors based on how often they prescribed Temodar, according to DOJ. In addition, DOJ alleged that Schering defrauded Medicaid of $4.3 million by failing to provide CMS with its best price on allergy treatment Claritin RediTabs. Schering provided free Claritin RediTabs to an HMO in order to secure future purchases and therefore should have provided Medicaid with larger rebates in order to ensure that the federal program obtained the best price for the drug, according to DOJ. DOJ said Schering also underpaid rebates for stomach treatment K-Dur. Schering in 2001 told FDA that the off-label promotions in 2001, 2002 and 2003 were isolated incidents (Kaiser Daily Health Policy Report, 8/30/06).
Settlement
Under the settlement announced in August, Schering Sales, a unit of Schering-Plough, pleaded guilty to conspiracy and agreed to pay a criminal fine of $180 million. Schering-Plough also agreed to pay a criminal fine of $255 million to settle civil aspects of the case. The company also pleaded guilty to making false statements to FDA and the Health Care Financing Administration (Dow Jones, 1/17). The sentencing "closes the loop" on an investigation by DOJ and the U.S. Attorney's Office in Boston that began in 2001, the AP/Newark Star-Ledger reports. U.S. District Judge Patti Saris said, "You cannot thumb your nose at the FDA," adding, "At the end of the day, you can't market off-label ... It's wrong." Thomas Sabatino, general counsel for Schering-Plough, said a new management team at the company has put in place a strict compliance program. He said, "We have a clear focus on business integrity, compliance and, honestly, doing the right thing" (Lavoie, AP/Newark Star-Ledger, 1/18).
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View drug information on Claritin RediTabs; Temodar.