EMD Serono = Greed

EMD Serono, Inc.
(a subsidiary of Merck KgaA)

Headquarters of Merck KGaA in Darmstadt
Frankfurter Str. 250
64293 Darmstadt
Tel.: +49 6151 72-0
Fax: +49 6151 72-2000

EMD Serono, Inc.
One Technology Place
Rockland , MA 02370
Tel.: 800 283 8088

Managing Director: Fereydoun Firouz


EMD Serono Research Center, Inc.
EMD Serono Biotech Center, Inc.

45A Middlesex Turnpike,
Bedford Campus
Billerica, MA 01821
Tel.: 978 294 1100

EMD Serono is the name given to the U.S. operations of Serono S.A. after the Swiss company was acquired by the German drug/chemical giant Merck KGaA for $13 billion in 2006. Merck KGaA is not affiliated with U.S. drug maker Merck & Co.

Merck is a global pharmaceutical and chemical company with total revenues of € 7.1 billion (11 billion US$) in 2007 and 32,458 employees in 59 countries. The Merck family holds approximately 70% interest and free shareholders own the remaining approximately 30%.

EMD Serono, Inc. employs more than 850 employees in the United States. This includes more than 500 employees in its U.S. headquarters in Rockland, Massachusetts and 150 employees at its research [EMD Serono Research Center, Inc.] and production site in Billerica, Massachusetts. The global headquarters of Merck Serono S.A. are located in Geneva, Switzerland.

Senior Management Team

Fereydoun Firouz, President & CEO, EMD Serono

Fereydoun Firouz
Fereydoun Firouz is President and CEO of EMD Serono, Inc. In this capacity, his responsibilities include driving the strategic direction of the US organization as well as managing the day-to-day operations of the US affiliate of Merck KGaA, Darmstadt, Germany. He is a member of the Executive Management Committee of Merck Serono. Mr. Firouz is an active participant and Board member of the Biotechnology Industry Organization (BIO), Pharmaceutical Research and Manufacturers of America (PhRMA) and the Massachusetts Biotech Council (MBC).

Steve Arkinstall, Ph. D.
Dr. Steve Arkinstall is Vice President of Research, US, and head of the EMD Serono Research Institute.

Renee Connolly
Ms. Renee Connolly joined EMD Serono, Inc. in June 2004 as Vice President of US Communications, where she is responsible for all external and internal communications, including public relations and community affairs. She is active in PhRMA, BIO, and the Massachusetts Biotechnology Council.

Tom Gunning
Thomas Gunning is Vice President and General Counsel at EMD Serono, where he is responsible for managing the organization's US legal affairs.

James Hoyes
James Hoyes is the Chief Commercial Officer at EMD Serono, Inc., responsible for business operations in the company's key therapeutic areas of Neurology and Endocrinology, as well as Managed Care and Sales and Marketing Operations.

John Huycke
Mr. John Huycke was appointed Vice President of US Operations & Process Innovation at EMD Serono, Inc. in 2006

William Jacobsen
Mr. William Jacobsen is Site Director, Technical Operations for EMD Serono in Billerica, MA.

Bruno Musch
Bruno C. Musch, MD, PhD entered Serono in March 2005 and has been the Corporate Vice President for Neurology Global Product Development and recently Head of Neurology Clinical Development.

Stefan Rupp
Mr. Stefan Rupp is Chief Financial Officer at EMD Serono, Inc. where he manages Finance and IT, including involvement with Business Development as the company explores opportunities in the US market.

Lynn Taylor
Lynn A. Taylor is Vice President of Government Affairs for EMD Serono, Inc. Ms. Taylor is responsible for all legislative, policy, and political activity for EMD Serono and for the oversight of the Washington, D.C. office. She is also responsible for building and solidifying relationships with key Federal and State government officials, policy makers and other key stakeholders for EMD Serono. She also serves as the chief liaison to major industry associations for the company, including the Pharmaceutical Research and Manufacturers of America (PhRMA), the Biotechnology Industry Organization (BIO) and the Massachusetts Biotechnology Council (MBC).

Bharat Tewarie
Dr. Bharat Tewarie is Vice President, Head of Business Development US at EMD Serono Inc., where he is responsible for business development and M&A efforts.

Megan Wherry
Ms. Megan Wherry joined EMD Serono, Inc. in October of 2007 as Vice President of Human Resources.

Executive Compensation

The company does not disclose the compensation given to individual members of top management of the Executive Board of Merck KGaA. But Merck's 2008 annual report notes that the four members of the Executive Board received total compensation of 12.3 million euros—about $17.3 million, or an average of $4.3 million each. The year before the Executive Board had five members, who were paid an average of about $7.4 million each.

Sensitive Issues

The biggest controversy in the history of Serono's U.S. operations concerned its marketing of an AIDS drug called Serostim. In 2001 federal prosecutors launched an investigation of the company after an employee whistleblower charged that Serono was bribing doctors and faking test results to increase sales of the medication. The probe led to the filing of federal criminal and civil charges against the company, whose U.S. operations were then known as Serono Laboratories.

In October 2005 Serono agreed to pay $704 million (consisting of a $137 million criminal fine and $567 million for the civil liabilities) to settle the charges. In a press released issued by the U.S. Department of Justice, then-Attorney General Alberto Gonzales was quoted as saying: "Serono abused the system of testing and approval, and put its desire to sell more drugs above the interests of patients."

Serono agreed to plead guilty to charges that it conspired with medical device maker RJL Sciences to market diagnostic software that was not fully approved by the Food and Drug Administration. Serono also pleaded guilty to charges that it offered doctors all-expenses-paid vacations to Cannes, France in exchange for writing new prescriptions for the drug, which cost $21,000 per course of treatment.

In the wake of the settlement, the company was also hit with private civil suits, including one that resulted in a settlement of $24 million.

Four executives of the company were personally charged with bribery, but they were acquitted by a federal jury in Boston in 2007. However, the former medical director of the company, Dr. Norma Muurahainen, pleaded guilty to related misdemeanor charges in July 2008. She was fined $150,000 and sentenced to one year of probation.

In April 2008 EMD Serono announced a major expansion of its facilities in Massachusetts This was to include a $50 million, 125,000-square-foot addition to a building in Billerica. In October 2008 the town granted the company a 20-year (partial) property-tax abatement worth an estimated $6.9 million.

Below are excerpts from news articles highlighting troubling issues with the company. See for yourself, and draw your own conclusions.

Serono To Pay $704M Settlement for Price,
Marketing Fraud of AIDS-Related Drug Serostim

Kaiser Daily HIV/AIDS Report / Oct. 18, 2005

The Swiss biotechnology company Serono on Monday agreed to pay $704 million to settle a Department of Justice investigation into the company's sales and pricing practices of its drug Serostim, which is used to treat AIDS-related wasting, the New York Timesreports (Lichtblau, New York Times, 10/18). The settlement amount is the third-largest for health care fraud and the largest-ever settlement for Medicaid fraud, according to DOJ (Squeo/Armstrong, Wall Street Journal, 10/18.

$704m penalty for drug maker
Improper efforts to build demand

By Ross Kerber and Charlie Savage,
Boston Globe /October 18, 2005

Swiss drugmaker Serono SA has agreed to pay $704 million to settle criminal and civil charges that it illegally promoted its AIDS drug, prosecutors said yesterday, in one of the biggest sums collected in the government's growing scrutiny of pharmaceutical firms.

The company's Serono Labs unit of Rockland agreed to plead guilty to charges it conspired to market Serostim by supplying doctors diagnostic software that was not fully approved by the Food and Drug Administration. The software, prosecutors said, led to an increase in demand for the drug prescribed to treat wasting in AIDS patients.

The company also agreed to plead guilty to offering doctors all-expense-paid trips to a medical conference in Cannes, France, in return for writing prescriptions of Serostim, an arrangement that US Attorney General Alberto R. Gonzales blasted as "The 'Cannes Kickback' campaign."

Texas receives $3.6M in settlement over AIDS drug

Austin Business Journal / Dec. 27, 2005

Texas and several other states joined the federal government in a $704 million criminal and civil settlement against a U.S. affiliate of Swiss drug maker Serono Inc. (NYSE:SRA) for illegally promoting and marketing the AIDS drug Serostim…

Due to lessening demand for the drug, the company and its subsidiaries promoted the use of altered computer software that falsely indicated the onset of weight loss and AIDS wasting. The skewed computer results were designed to induce physicians to prescribe Serostim for patients.

"This company chased big profits without regard for its product's effectiveness or safety, and today's results show that this will not be tolerated," Texas Attorney General Gregg Abbott says.

Serono pleaded guilty to conspiring with Clinton Township, Mich. medical device manufacturer RJL Sciences Inc. to aggressively market the software, which was not approved by the U.S. Food and Drug Administration, and also pleaded guilty to offering physicians who prescribed Serostim an all-expense paid trip to Cannes, France.

DC 37 Reaches Proposed $24 Million Settlement Against Drug Manufacturer

Press Release
AFSCME DC 37 News / February 20, 2007

The DC 37 Health & Security Plan participated as a lead plaintiff in a nationwide class action suit against EMD Serono, Inc., Serono Laboratories, Inc. & Merck Serono International S.A., the manufacturer of Serostim, which is prescribed to treat AIDS wasting.

According to Executive Director Lillian Roberts, "This case cried out for justice. Some of our most vulnerable members who could ill afford the co-pays for this drug were harmed economically as was our benefits Plan, which paid the hugely expensive ingredient costs for Serostim. Once the settlement is approved by the court, both our members and the Plan will be able to recoup a fair share of what they paid."

In early 2006, Serono Laboratories agreed to pay $704 million in fines and restitution to the federal government in a criminal investigation brought by the U.S. Attorney. Because that agreement did not provide any reimbursement to consumers and benefit plans, DC 37, a member of the Prescription Access Litigation Project (PAL), filed a civil suit in federal court against Serono.

PAL & AFSCME DC 37 announce $24 million settlement with Serono in case alleging illegal promotion of AIDS drug Serostim
Pharmaceutical company caused AIDS patients to pay for unnecessary medication

Press Releases / February 20, 2007

Boston, MA, [February 20] — The Prescription Access Litigation Project (PAL) and PAL member AFSCME District Council 37 Health and Security Plan (DC 37) today announced a settlement in a nationwide class-action lawsuit brought by DC 37 and others against EMD Serono, Inc. and Merck Serono International S.A. (jointly, Serono) (NYSE: SRA). The $24-million settlement resolves claims that Serono wrongfully encouraged doctors to prescribe the AIDS drug Serostim to patients for whom it was unnecessary…

The lawsuit, filed in September 2005, charged Serono with promoting the use of an unapproved medical device that improperly diagnosed people as having AIDS wasting; providing doctors with travel stipends in exchange for their agreement to prescribe Serostim; and marketing the drug for uses that were not approved by the FDA…

Alex Sugerman-Brozan, Director of PAL, explains: "We hope that this settlement will not only compensate those consumers and health plans that were deceived into paying unnecessarily for Serostim, but it will also serve as a precedent for other drug companies that would venture to take advantage of seriously ill patients in the name of profits…"

Former Serono medical director fined $150,000

By Todd Wallack
Boston Globe staff / Oct. 30, 2008

A former medical director for Serono Laboratories Inc., Dr. Norma Muurahainen, was sentenced to one year of probation and fined $150,000 after pleading guilty to misdemeanor charges related to allegations she helped distribute medical software to diagnose AIDS wasting without approval from the Food and Drug Administration.

Drug maker suspends sales of psoriasis drug on Health Canada's recommendation

By Staff
Canadian Press / Feb 20, 2009

TORONTO - The distributor of a psoriasis drug that is the subject of safety concerns has agreed to suspend sales of the medication in Canada.

Health Canada recommended that EMD Serono Canada Inc. stop the marketing of Raptiva, the brand name for the drug efalizumab. Raptiva was authorized in October 2005 for treatment of moderate to severe chronic plaque psoriasis in patients 18 years of age and older.

But use of the drug has been linked to cases of a condition called progressive multifocal leukoencephalopathy or PML, a severe and sometimes fatal neurological disease.

And other serious infections have been seen in people who have taken the drug for three years or more, including Guillain-Barre syndrome, encephalitis, meningitis and sepsis, a bloodstream infection.

The European drug regulatory agency has already decided that the medication's risks outweigh its benefits.

On Thursday, the U.S. Food and Drug Administration warned doctors and people taking the drug that it has received reports of three confirmed cases and one possible case of PML in Raptiva users. All four patients were treated with Raptiva continuously for more than three years.

Three of the four people have died. There is no known effective treatment against PML.…

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