Schering-Plough Corp., a U.S. drugmaker under investigation
for its sales and marketing practices, said Friday it was
being probed for destroying documents related to the inquiry
and that prosecutors intended to seek a criminal indictment.
The U.S. attorney's office in Boston said in a letter Wednesday
to the company that a federal grand jury was probing whether
Schering-Plough sold misbranded medicines, submitted false
pricing data or offered free samples to lure customers.
The attorney's office now is asking whether Schering-Plough
obstructed justice, the company, based in Kenilworth, New
Jersey, said in a statement.
"The company is continuing to cooperate with the U.S.
attorney's office on this matter," a spokeswoman, Denise
Samantha Martin, spokeswoman for the U.S. attorney's office
in Boston, said the office would neither confirm nor deny
the investigation. Shares in Schering-Plough were down 33
cents, or 1.7 percent, at $18.57 in late trading on the New
York Stock Exchange.
Schering-Plough had previously disclosed that federal prosecutors
in Boston were probing its practices regarding sales, marketing
and funding for testing of its medicines on people. The new
letter from the U.S. attorney's office there stated that Schering-Plough
was a target of a criminal investigation on four fronts. The
company said those allegations were:
Providing remuneration to physicians, managed care organizations
and others to induce purchase of its pharmaceutical products
under federal health-care programs.
Selling drugs for conditions for which the Food and Drug Administration
has not specifically approved use.
Giving the government false or incomplete wholesale pricing
information on drugs, inflating prices paid for those drugs
by the Medicaid program.
Destruction of documents and obstruction of justice relating
to this investigation.
Schering-Plough said it had implemented "certain changes
to its sales, marketing and clinical trial practices and is
continuing to review those practices to ensure compliance
with relevant laws and regulations."
It also said the U.S. attorney's office had advised the company
that it would have an opportunity to submit evidence and legal
arguments responding to the allegations.
In February, Schering-Plough added $150 million to its legal
reserves because of the investigation, cutting fourth-quarter
and 2002 profit. Last May, the company agreed to pay $500
million to settle U.S. regulators' complaints about production
flaws that delayed approval of Clarinex, the successor to