A former sales representative for the drug company Serono Laboratories pleaded guilty on Tuesday to offering kickbacks to three New York doctors for writing prescriptions for a drug with declining sales.
Adam Stupak, 40, of Hewlett, New York, pleaded guilty before U.S. District Judge Douglas Woodlock to a three-count information charging him with offering to pay illegal remunerations, according to a statement from U.S. Attorney Michael Sullivan's Boston office.
Stupak was a New York City regional sales manager for Geneva, Switzerland-based Serono Laboratories -- known as Serono -- from 1997 to 2000. The world's third-largest biotechnology firm, the company is a subsidiary of Ares-Serono, S.A., which had its U.S. headquarters in Norwell, Mass., at the time.
Serostim contains the human growth hormone somatropin, which was approved by the U.S. Food and Drug Administration in 1996 to treat AIDS wasting, an often-fatal condition involving severe weight loss, common among AIDS patients at the time.
At about the same time the Food and Drug Administration approved the drug, protease inhibitor drugs came on the market. Those drugs, when used in combinations or "cocktails," sharply curtailed the AIDS virus in patients, making them less prone to AIDS wasting.
Demand for Serostim began to fall, and by February 1999, Serono's Metabolic & Immune Therapy unit, which was responsible for selling Serostim, warned Stupak and five other regional managers that sales were off. The unit ordered them to "dig their way out" of a financial crisis brought on by the declining sales, according to prosecutors.
Under a sales plan called the "$6m-6 Day Plan," Stupak and the other regional directors were required to identify the highest prescribing physicians in their region and target them with financial incentives to boost prescriptions to a goal of $6 million in 6 days.
Stupak offered to give three New York City doctors who treat AIDS patients an all-expenses-paid trip to a medical conference in Cannes, France, if each one agreed to write, within one week, 30 prescriptions of Serostim.
The cost of a single 12-week course of Serostim treatment was valued at approximately $21,000. The "$6m-6 day Plan" was designed to bring in about $6.3 million for Serono.
Messages left at Stupak's home and the office of his attorney, Evan Slavitt, were not immediately returned.
Woodlock scheduled sentencing for March 15. Stupak faces up to five years' imprisonment and three years of supervised release, along with a $25,000 fine on each count.