Four top officials of the U.S. arm of Swiss pharmaceutical manufacturer Ares-Serono were indicted on federal charges of illegally conspiring to offer and offering trips to Cannes, France, to physicians in exchange for their boosting the number of prescriptions they were to write for a Serono AIDS drug.
Indicted is John Bruens, 48, of San Diego who in 1999, at the time of the alleged illegal activities, was vice president of marketing for the metabolic and immune therapy business unit of Norwell, Mass.-based Serono Laboratories, the U.S.-based subsidiary of the Geneva, Switzerland, drugmaker.
Also indicted are Mary Stewart, 44, of North Andover, Mass., vice president of sales for the unit; Melissa Vaughn, 43, of Louisville, Colo., a regional sales director; and Marc Sirockman, 41, of Flemington, N.J., also a regional sales director.
All four are charged with conspiracy. Bruens and Stewart are charged with seven counts of offering to pay illegal remunerations while Vaughn and Sirockman are charged with two such counts, according to a government statement. If convicted, they face up to five years in prison and fines of up to $250,000 on each count, according to a statement by U.S. Attorney Michael Sullivan, whose Boston office filed the charges. A spokesman for Sullivan said the investigation is continuing.
Vaughn and Sirockman reported directly to Stewart, who, along with Bruens, reported to an executive of the unit referred to only in the indictment as "Executive X." Also named as a co-conspirator in the 24-page document, was Adam Stupak, who was the regional director of sales in the New York Region. Stupak pleaded guilty in December to three counts of offering to pay illegal remunerations, according to a statement from Sullivan's office.
The indictment, filed in the U.S. District Court of Massachusetts by Sullivan, alleges Bruens and Stewart along with Executive X faced a national sales meeting scheduled for mid-March 1999 knowing their business unit sales were lagging for their drug Serostim, a recombinant human growth hormone, which is used treat AIDS patients with extreme weight loss.
The drug was sold in 12-week courses of therapy at a cost of $21,168, according to the indictment, and about 75% of sales were paid for by Medicaid programs in the various states.
Bruens and Stewart summoned Vaughn, Sirockman and Stupak, plus three other regional directors who were unnamed in the indictment, to an emergency meeting at the Boston Harbor Hotel on March 1, 1999, where they were told they needed to "dig their way out" of the shortfall in the company's sales goal, the indictment said. They were told of a "$6m-6 Day Plan," according to the indictment. The plan called for offering key physicians deemed "thought leaders" free trips for themselves and a guest to an upcoming healthcare conference in Cannes if they agreed to write additional prescriptions of Serostim, it said. The goal was to generate $6 million in new prescription sales.
Some physicians rejected the offer, according to the indictment, while others accepted and the company picked up the tab in the "thousands of dollars" for rooms, meals, entertainment and gifts. In a separate press statement from Sullivan's office, Bruens announced the names of 10 physicians as invitees at the Cannes conference.
Accounts of several interactions with a number of physicians who were offered the trips were reported in the indictment, but all of the physicians were referred to in the document only by one or two initials, such as "Dr. P" or "Dr. RL."
Vaughn reported in a voicemail message to Bruens, Stewart, Sirockman and others that at least one doctor had said that the program was "unethical and the very thing that the FDA looks for," according to the indictment.