Schering-Plough settles investigation and agrees to pay $435 million

US drug major Schering-Plough says that it has reached agreement with the US Department of Justice and the Attorney's Office for the District of Massachusetts to settle a previously-disclosed investigation, started in 2001, relating to the firm's sales, marketing and clinical trial practices and programs.

The firm noted that, under the terms of the deal, it will pay $255.0 million to resolve civil aspects of the investigation and its subsidiary Schering Sales Corp will plead guilty to one count of conspiracy to make false statements to the US government and pay a criminal fine of $180.0 million, making the total $435.0 million. Investigators found evidence that S-P had marketed some of its products for "off-label" indications which were not approved by the Food and Drug Administration.

S-P also stressed that the offenses and investigation began before the new management team, under current chief executive Fred Hassan, took over in April 2003. This is the second time that the company has settled charges; nearly two years ago, it agreed to pay $290.0 million following a guilty plea by Schering Sales to criminal charges that it fraudulently marketed and priced its then blockbuster allergy drug Claritin (loratadine) in violation of the federal Medicaid Drug Rebate Statute, as well as a $52.5 million fine for violating the Anti-Kickback Act (Marketletter January 3 & 10, 2005).