News in brief - Nov. 7, 2005

AIDS drugmaker to settle fraud claims for $700 million - Former FDA chief under investigation - Assistance program for low-income Medicare beneficiaries extended

AIDS drugmaker to settle fraud claims for $700 million

Swiss biotechnology company Serono S.A. has agreed to pay $704 million to settle claims by the U.S. attorney general that the company and its U.S. subsidiaries conducted illegal schemes to promote and sell the AIDS drug Serostim.

The total settlement includes nearly $137 million in criminal fines and about $567 million to settle civil claims. It was the third-largest fraud recovery in U.S. history, according to the attorney general's office.

The government accused the company of several offenses, including offering kickbacks to physicians for writing prescriptions for Serostim. The U.S. Food and Drug Administration approved the drug, used to treat AIDS wasting, in 1996.

Former FDA chief under investigation

The Health and Human Services Office of Inspector General is investigating the circumstances under which the former Food and Drug Administration commissioner left his job in September.

Lester Crawford, DVM, PhD, unexpectedly resigned as FDA chief less than three months after receiving Senate confirmation to the post. In a statement to agency staff, Dr. Crawford cited his age and his more than three year's tenure at FDA as reasons for leaving.

Several lawmakers requested the IG investigation after reports surfaced about potential financial improprieties on the part of the commissioner that may have prompted the resignation. An HHS spokesman declined to comment on the allegations, stating that the issue was an internal personnel matter.

Assistance program for low-income Medicare beneficiaries extended

The federal government will continue to pick up the cost of Medicare outpatient premiums for certain low-income people under legislation that President Bush signed into law last month.

The Medicare qualified individual program, or QI, pays the Part B premiums for nearly 200,000 seniors who earn between 120% and 135% of the poverty level and who have limited assets. Such premiums are expected to cost nearly $90 per month starting in January.

QI temporarily lost its federal authorization at the end of September when Congress failed to renew it. After receiving pressure from Bush, both houses agreed on a bill to extend the program through September 2007.