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Archive for Saturday, July 31, 2004

Drug firms to pay $300M each in settlements

July 31, 2004

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— Schering-Plough Corp. will pay $346 million to settle charges that it paid off an HMO to protect the price of its top-selling allergy drug, the company and federal prosecutors announced Friday.

A subsidiary of the company, Schering Sales Corp., also will plead guilty to violating federal laws against kickbacks and be banned from federal health programs for five years, authorities said.

The Schering-Plough settlement followed a five-year federal investigation into the company's marketing of Claritin as the drug faced increasing competition from alternatives.

The announcement came on the same day that another pharmaceutical maker, Bristol-Myers Squibb Co., said it would pay $300 million to settle a class-action lawsuit claiming it made overly optimistic statements about a cancer drug to protect its investment in the drug's marketing rights.

That lawsuit also charged shady accounting related to the company's 2002 announcement that it had overstated revenue between 1999 and 2001 by $2.5 billion.

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