Drug company Serono settles lawsuit alleging it paid doctors to prescribe

By Producer Laura Strickler and Intern Aurora Ellis

The Swiss drug giant Merck Serono S.A. will pay $44.3 million to the US government to settle a lawsuit that charged the company illegally funneled money to doctors to prescribe and promote their Multiple Sclerosis drug Rebif, according to the Department of Justice.

A Serono employee - a California based regional business director - blew the whistle on the company's alleged payments and filed a false claims lawsuit back in 2005, according to court documents.

Allegations in the court filings indicate the drug company paid a top prescriber of Rebif, often through a New York based Multiple Sclerosis clinic. The whistleblower claims Serono company management referred to the relationship by saying, "we have a whole money laundering thing going on," with the clinic. The complaint indicates that payments to the clinic totaled more than $300,000.

A spokesperson for Serono told CBS News that although Serono settled the lawsuit the company is not admitting to any wrongdoing. "It is important to note that the settlement contains no claims that unnecessary prescriptions for Rebif were written, no allegations of patient harm and no admission of fault by the company," said Thomas G. Gunning, Senior Vice President and General Counsel for EMD Serono, Inc. "EMD Serono is committed to operating its business with the highest legal, compliance and ethical standards," Gunning said.

The Justice Department says the company paid doctors 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." The complaint alleges Serono did not notify the government of these payments.

"The health care of our seniors and other vulnerable citizens under the Medicare and Medicaid programs should be based upon sound medical decisions, not upon decisions tainted by influence and corruption," said Tony West, Assistant Attorney for the Justice Department's Civil Division.