“You have to differentiate the salesperson in the customer’s mind-just like you differentiate brands,” he explains. At Schering-Plough, he has concentrated on motivating and organizing salespeople to create trusting relationships with doctors. And consistent with his philosophy, the turnaround started with sales.Ĭonsidering sales reps as less than crucial to strategy, Hassan cautions, is a big mistake.
Since 2003, when Hassan took the helm at the global pharmaceutical company, he has overseen a remarkable recovery in performance. But for Fred Hassan, chairman and CEO of Schering-Plough, the primary focus in a turnaround is the top line. "This settlement sends a clear message to the pharmaceutical industry,” said Paul McNulty, the US deputy attorney general, “that the Justice Department will not tolerate these deceptive and illegal marketing practices.Most CEOs who specialize in turning around struggling companies focus on costs. While Schering-Plough said the off-label promotions were isolated incidents, the government said they were part of a national plan that the pharmaceutical company's staff were trained to enact. Justice also said Schering-Plough underpaid rebates for the stomach ailment drug K-Dur (a potassium supplement). The Justice Department also alleged that Schering-Plough defrauded Medicaid of US$4.3 million in the late 1990s by overcharging the agency, which provides health insurance to the poor and disabled, for the systemic antihistamine, Claritin RediTabs. According to the Justice Department, Schering-Plough paid doctors honoraria, directed prestigious and lucrative research grants their way, placed them on well-paying medical advisory boards and treated them to lavish dinners and other forms of entertainment in return for prescribing the drugs for the non-approved (off-label) usages. The allegations involved temozolomide (Temodar), which the company promoted for use in treating brain tumours and metastatic cancer, and Interferon alfa-2a (Intron A), for use in superficial bladder cancer and hepatitis C.Īlthough it's illegal for pharmaceuticals to promote drugs for non FDA-approved treatments, doctors have no such restrictions.
One of the largest health care fines ever meted out by the Justice Department, it brings to US$1.3 billion the total paid by Schering-Plough as a result of the settlements.Īccording to the government, Schering-Plough engaged in illegal sales and marketing practices involving several cancer drugs by promoting their use for treatments not government-approved at the time. The case marks the third time in the last 5 years that the company, which has annual sales of approximately US$10 billion, has reached a multi-million settlement with the government. The agreement was reached in late summer with the US Justice Department, which also alleged the New Jersey–based company had defrauded Medicaid, the government health care program. Schering-Plough Corp., the US pharmaceutical manufacturer perhaps best known for its anti-allergy medication Claritin, has agreed to pay US$435 million in fines to settle criminal and civil charges that it illegally promoted several drugs.
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