Why an M.S. Drugmaker Took 2 Weeks to Disclose Its CEO Had Quit
Multiple sclerosis drugmaker EMD Serono has a new CEO, James Hoyes, which isn't news until you ask what happened to the old CEO. Former CEO Fereydoun Firouz resigned sometime before May 3, but the company didn't tell anyone outside the building until it published this May 20 press release.
It was almost as if Serono was unprepared when Firouz suddenly "independently decided to pursue other professional opportunities," as the statement put it. The company didn't quote Firouz even though he had been with the company for two decades.
In an unfortunate coincidence, Firouz's departure came 24 hours before Serono agreed to pay a $44 million settlement in a case in which it had been accused of using an M.S. charity as a "money laundering thing" that funneled kickbacks to doctors who prescribed a lot of its M.S. drug, Rebif. The charity then sent cease-and-desist letters to an M.S. activist who used her Facebook page to highlight the allegations. Firouz was not personally accused of any wrongdoing.
Feyrouz became CEO in 2003. Serono said:
During his tenure as President and CEO of EMD Serono, Mr. Firouz tripled the revenues and capabilities of the US organization, instilling pride, integrity and purpose amongst the employee base with a focus on advancing science and medicine, impacting the health of patients, being a leader and contributing to society in a meaningful way.Another "meaningful way" that Firouz tripled his revenues was by illegally promoting human growth hormone to AIDS patients for unapproved "off-label" uses. In 2005, the company paid $705 million to make the case go away. That settlement excluded Serono from receiving revenue from Medicare and Medicaid, and put the company under a five-year corporate integrity agreement. The more recent "money laundering thing" extended the CIA another three years.
Perhaps Hoyes will have more luck during his tenure. He has already promised to be more transparent about Serono's payments to doctors.
Related:
- M.S. Charity Wants "Money Laundering" Allegation Scrubbed From Facebook
- How M.S. Drugs Are Promoted: "We Have a Whole Money Laundering Thing Going On"