BOSTON, Mass., Dec. 21 /PRNewswire/ -- A Hewlett, New York man pleaded guilty today in federal court to offering kickbacks to three New York City doctors by offering them an all expenses paid trip to attend a medical conference in Cannes, France in April of 1999, in return for writing prescriptions of Serostim, a brand of recombinant human growth hormone used to treat wasting in AIDS patients, manufactured and sold by Serono Laboratories, Inc., now known as Serono, Inc., a subsidiary of Ares-Serono, S.A.
United States Attorney Michael J. Sullivan; Peter D. Keisler, Assistant Attorney General of the U.S. Department of Justice's Civil Division; Kenneth W. Kaiser, Special Agent in Charge of the Federal Bureau of Investigation in New England; Kim A. Rice, Special Agent in Charge of the Metro-Washington Field Office of the U.S. Food and Drug Administration's Office of Criminal Investigations; Joseph C. Moraski, Special Agent in Charge of the Boston Regional Office of Investigations for the Department of Health and Human Services' Office of Inspector General; James M. Benages, Regional Director of the U.S. Department of Labor's Employee Benefits Security Administration; and Joseph Finn, Special Agent in Charge of the Boston Field office of the U.S. Postal Service's Office of Inspector General, announced today that ADAM STUPAK, age 40, of 1334 Club Drive, Hewlett, New York, pleaded guilty before U.S. District Judge Douglas P. Woodlock to three count Information charging him with Offering to Pay Illegal Remunerations.
At today's plea hearing the prosecutor told the Court that, had the case proceeded to trial, the evidence would have proven that in April, 1999, STUPAK, worked for Serono, an international pharmaceutical and bio-technology company with corporate headquarters in Geneva, Switzerland and US headquarters at the time in Norwell, now in Rockland, Massachusetts. STUPAK was the Regional Director for sales in New York City and was responsible for sales and marketing of the drug Serostim, which is the propriety name or trademark of the generic drug, "somatropin." Somatropin is recombinant human growth hormone that received accelerated approval from the U.S. Food and Drug Administration ("FDA") in 1996 for Serostim to treat AIDS wasting, also known as "cachexia", a condition involving profound involuntary weight loss in AIDS patients. At the time the FDA approved Serostim, AIDS wasting was an AIDS defining condition that constituted the leading cause of death among AIDS patients.
Serostim came on the market concurrently with the advent of protease inhibitor drugs. These drugs, often referred to as Highly Active Anti- Retroviral Therapy, dramatically curtailed, in the United States, the proliferation of the AIDS virus itself, particularly when used in combination with one another (commonly referred to as "AIDS cocktails"). Given the decreased viral loads in HIV patients taking these drugs, the incidence and prevalence of the AIDS wasting syndrome began to markedly decline among AIDS patients. Consequently, the demand for Serostim began to drop significantly immediately following its launch in the Fall of 1996.
By February, 1999, the Serono business unit responsible for selling Serostim, Metabolic & Immune Therapy ("M & IT"), was falling short of its sales forecasts. By this point, the sales force was lead by six Regional Directors, including STUPAK. Five other Regional Directors were responsible for sales territories in the Northeast, Southeast, Central, Western and the Mid- Atlantic regions of the United States.
In March, 1999, the six Regional Directors, including STUPAK, were summoned by the M & IT Management to a meeting in Boston, Massachusetts where they were told that they were falling far short of their sales forecasts and needed to fix the fiscal problem. M & IT Management ordered the Regional Directors to target the top prescribing doctors to induce them to write more prescriptions in a plan called the "$6m-6 Day Plan" -- meaning that each Regional Director, including STUPAK, was required to identify the highest prescribing physicians in his/her region and target those physicians with financial incentives in order to get the required number of prescriptions to achieve the sales goal of $6 million in 6 days.
Part of the "$6m-6 Day Plan" was to offer key high prescribing doctors (and a guest) an all expenses paid trip to the 3rd International Conference on Nutrition and HIV Infection being held in Cannes, France for three days in April, 1999, in return for writing, within one week, thirty prescriptions of Serostim. The cost of each prescription of Serostim induced by the offer of the trip to Cannes was for a twelve-week course of treatment valued at approximately $21,000, thus the market value of thirty scripts written by each doctor was $630,000.
In March, 1999, STUPAK, together with another Serono sales representative, visited the offices of Dr. "O," Dr. "G" and Dr. "W," each of whom practiced medicine in New York City and treated patients that were HIV positive and/or suffering from AIDS. During these meetings, STUPAK offered the doctors the trip to the Cannes Conference in return for the doctor writing at least 10 additional prescriptions of Serostim.
During a presentation at Serono's National Sales meeting held later in the month of March, 1999, the marketing department announced the names of ten physicians who were "US Invitees" to the Cannes Conference. During that announcement, the marketing department also falsely stated, in a slide presentation, that each of these physicians had, "committed to conducting two regional speaking programs to summarize the meeting proceedings," when in fact, no such commitment had been requested or made. Consistent with the "$6m-6 day" plan and its target of thirty twelve-week prescriptions of the drug Serostim, the value of this business to Serono totaled $6,300,000, more or less.
Judge Woodlock scheduled sentencing for March 15, 2005. STUPAK faces up to 5 years' imprisonment, to be followed by 3 years of supervised release, and a $25,000 fine on each count.
The investigation is continuing.
The case was investigated by the Federal Bureau of Investigation; the U.S. Food and Drug Administration's Office of Criminal Investigations; the Department of Health and Human Services' Office of Inspector General, Office of Investigations; the Department of Labor's Employee Benefits Security Administration; and the U.S. Postal Service's Office of Inspector General. It is being prosecuted by Assistant U.S. Attorney Mary Elizabeth Carmody in Sullivan's Health Care Fraud Unit and Trial Attorney Sondra L. Mills in the Department of Justice's Consumer Litigation Unit.
U.S. AttorneyCONTACT: Samantha Martin of U.S. Attorney's Office, +1-617-748-3139
