Arkansas Medicaid to Reap $1.1 Million from Drug-Fraud Settlement

OCTOBER 21, 2005 - Posted at 8:17 a.m. CDT

LITTLE ROCK, AR - Arkansas' Medicaid program will get nearly $1.1 million from a settlement this week involving Serono Laboratories.  The state attorney general's office said yesterday that the company admitted it gave doctors kickbacks and manipulated AIDS tests to increase the market for its AIDS drug Serostim.

On Monday, Serono agreed to pay $704 million and plead guilty to federal conspiracy charges.  Arkansas Attorney General Mike Beebe said the state's share of the national settlement is about $4.7 million, the total amount generated when the $1.1 million re-enters the Medicaid program and draws federal matching funds on a three-to-one basis.  Beebe said every dime that was expended in Arkansas in the Arkansas Medicaid program is being recovered.

Serostim is used to treat AIDS "wasting," an often-fatal condition involving severe weight loss.  The demand for the drug diminished in the late 1990s with the advent of "cocktails" of AIDS drugs that made patients less susceptible to wasting.  Federal authorities said the company offered doctors free trips to the south of France to prescribe Serostim when it wasn't necessarily the most appropriate method of treatment and beyond prescribed time limits.

(Copyright 2005 by The Associated Press.  All Rights Reserved.)