Jury acquits 4 in Serono kickback case

A jury yesterday acquitted four former Massachusetts executives of drug maker Serono SA of charges they bribed doctors to prescribe an AIDS drug, a major setback for local Justice Department prosecutors who have focused on the pharmaceutical industry.

The jury in US District Court in Boston took just a few hours to set aside all charges against the four defendants, a stark contrast to the decision the company made in 2005 to pay a near-record $704 million to settle related criminal and civil charges.

Defense attorneys said the outcome showed local prosecutors have pushed too hard on the industry. They noted the case of TAP Pharmaceutical Products, which in 2001 agreed to pay $885 million to settle kickback charges, only to see individual executives acquitted on similar charges in 2004.

"The jury's verdict once again says this US attorney's office has been overreaching on pharmaceutical cases," said Tracy Miner, a Mintz Levin attorney who represented one of the former Serono employees and had previously defended a TAP executive. "It's another case where the office has inappropriately charged employees of a pharma company who did nothing more than their jobs," Miner said.

Defendant Mary Stewart, a former Serono sales vice president from North Andover, said she felt "a lot of relief and vindication."

"This was really crazy from the beginning. There was no weight or substance to it, and it was really horrible to have to go through this " she said. Stewart had faced a maximum of eight years in prison and fines of about $1 million had she been convicted on all counts.

A spokeswoman for the US attorney's office in Boston had no immediate comment and did not respond to further messages.

A spokeswoman for Serono, whose US headquarters is in Rockland, said it would not be "appropriate" for the company to comment. Last year Serono was purchased by German chemical giant Merck KGaA for more than $13 billion.

Investors may not mind the company's previous decision to pay to the settle the case, since it removed a major risk factor for Serono at the time. Had it been found guilty, Serono could have been barred from doing business with government drug-purchasing programs and effectively forced out of US markets.

Charges against the individuals were first filed in April 2005. The government alleged the four executives, who all worked for Serono in the late 1990s, offered doctors trips to a medical conference in Cannes, France, in return for prescribing certain amounts of Serostim, a human growth hormone. The drug was used to treat wasting in AIDS patients, and the company faced competition from newer AIDS drugs entering the market.

Besides Stewart, the government charged another former vice president, John Bruens now of Maine , and two regional sales directors, Melissa Vaughn of Colorado and Marc Sirockman of New Jersey, with conspiracy and bribery.

Sirockman was represented by Miner. Bruens's attorney, Thomas Souther of Sidley, Austin in New York, said a combination of arguments convinced the jury that the company's offers to send doctors to Cannes did not depend on them writing certain numbers of prescriptions for the drug. "No one ever intended to offer a bribe or kickback to anyone," he said.

Bruens said, "This has been a terrible ordeal for me and my family. I am thrilled that I have been exonerated, and I look forward to being able to restore some sense of normalcy to my life."

Serono paid the defendants' legal expenses, Stewart said. She said she now runs a consulting and retail business, Feng Shui Boston, promoting the Chinese harmonic design philosophy. After the verdicts yesterday, the defendants and their attorneys had lunch at The Boston Harbor Hotel, Stewart said -- once the scene of a 1999 Serono company meeting at which, prosecutors had charged, the executives outlined the illegal sales scheme.

"This is a case that never should have been brought, and the speed of the jury's verdict confirms it," said Vaughn's attorney, Adam Hoffinger of Morrison and Foerster.

Ross Kerber can be reached at kerber@globe.com.