Schering Sales Corp. is accepting the ultimate penalty under the antikickback statute: a five-year ban from participating in federal government contracts.

As part of $345 mil. settlement agreement between Schering-Plough and federal prosecutors announced July 30, the company's Schering Sales Corp. subsidiary will be banned from entering into federal contracts for a period of five years.

The ban appears to be a first during the recent round of government investigations into pharmaceutical marketing and pricing practices.

The impact of the ban is largely symbolic. Schering-Plough, Inc. is entering into a ¹ corporate integrity agreement with the HHS Office of Inspector General that will allow the parent company to continue to participate in government programs.

"OIG-HHS represents that the guilty plea of Schering Sales Corporation in this parallel Criminal Action and the resulting mandatory exclusion of Schering Sales Corporation does not give rise to a mandatory exclusion action against Schering," the ² settlement agreement states.

In a press release announcing the settlement, the company said that "the agreement will not affect Schering-Plough Corporation's ongoing business with any customers, including the federal government."

The company said that Schering Sales Corporation, for all intents and purposes, will cease to exist. While the legal entity will remain intact, Schering Sales Corporation will hold limited assets and no personnel.

- Adam Eckstein

Schering Corp. Accepts Federal Contract Ban Under Settlement

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