The Prescription Access Litigation Project (PAL) has entered a $24 million settlement with EMD Serono and Merck Serono International to resolve a nationwide classaction lawsuit. The lawsuit alleged that Serono wrongfully encouraged doctors to prescribe the AIDS treatment Serostim to patients who did not need the drug.

The lawsuit, filed in September 2005, also accused Serono of promoting an unapproved medical device that improperly diagnosed people as having AIDS wasting, providing doctors with travel stipends in exchange for agreements to prescribe Serostim and marketing the drug for unapproved uses. The case included no allegations of medical harm to patients from Serono's conduct.

This settlement comes after a deal the company reached in October 2005 with the Department of Justice. In that settlement, Serono agreed to pay $704 million in fines and pleaded guilty to criminal charges for the unlawful promotion of Serostim. Serono also agreed to a corporate integrity agreement involving internal audits and government monitoring. According to PAL, the U.S. attorney in charge of the case said "nearly 85 percent of prescriptions written for Serostim were not medically necessary."

The 2005 settlement reimbursed government programs for Serostim payments but did not include reimbursement for patients and private health plans. This recently resolved lawsuit was intended to recover payments for those groups, PAL said. The settlement agreement received preliminary approval from the U.S. District Court for the District of Massachusetts and must receive "final approval" from the court before it goes into effect, the announcement added.