Schering-Plough is likely to face criminal charges as federal prosecutors in Boston began a grand jury investigation into its sales and pricing practices, and document destruction.
The US drugmaker said the government had "substantial evidence to support" its case. Federal prosecutors allege that a Schering-Plough unit induced drug sales with gifts or services; promoted drugs for uses not approved by regulators; defrauded federal health care programmes with inflated pricing; and obstructed the investigation.
The US Attorney in Massachusetts, a regional arm of the Justice Department, outlined its intent to pursue an indictment in a letter on Wednesday. Criminal charges in such cases can result in substantial fines and probation.
Schering-Plough's shares have sunk to six-year lows as investor confidence has been battered by plunging profits, numerous investigations and few new drugs to lift sales. The company employs 1,200 in the Republic.
Yesterday, the shares fell further, down by 3 per cent in mid trade to $18.26. - (Financial Times Service)
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