White House Projects Highest Deficit Ever

WASHINGTON (AP) - This year's federal deficit will soar to a record $445 billion, the White House projected Friday.

The administration's annual summertime budget update forecast shortfalls falling to $331 billion next year, then fading to $229 billion by 2009.

Local Drug firms settle suits on claims, kickbacks
Schering-Plough to pay $346 million; Bristol-Myers Squibb agrees to $300 million.

PHILADELPHIA -- Schering-Plough Corp. will pay $346 million to settle charges that it paid off an HMO to protect the price of its top-selling allergy drug, the company and federal prosecutors announced Friday.

A subsidiary of the pharmaceutical company, Schering Sales Corp., will also plead guilty to violating federal laws against kickbacks and be banned from federal health programs for five years, authorities said.

The announcement came on the same day that another pharmaceutical maker, Bristol-Myers Squibb Co., said it would pay $300 million to settle a class-action lawsuit claiming it made overly optimistic statements about the cancer drug Erbitux to protect its investment in the drug's marketing rights. Bristol-Myers developed the colon-cancer drug with ImClone Systems.

That suit also charged shady accounting related to the company's 2002 announcement that it had overstated revenue from 1999 to 2001 by $2.5 billion.

If the settlement is approved by a federal judge, it would be the largest by a drug company in a securities-fraud case in U.S. history.

The Schering-Plough settlement followed a five-year federal investigation into the company's marketing of Claritin as the drug faced increasing competition from alternatives like Allegra.
Prosecutors said that when Cigna, one of the nation's largest health insurers, threatened to switch its patients to less expensive medications, Schering-Plough offered the company $10 million in incentives, plus an $1.8 million "data fee" for information it did not need.

The agreement lowered the price of Claritin for Cigna and its customers but violated a federal law requiring drugmakers to give their lowest prices to Medicaid.

The Kenilworth, N.J.-based Schering-Plough said it would pay a criminal fine of $52.5 million and civil damages of $293 million.

The five-year exclusion from federal health care programs will only apply to Schering Sales, not its parent company, and will not limit Schering-Plough's ability to sell medications, authorities said.

Philadelphia Inspires Kerry Rally
Kerry Whips Supporters Up For Election

PHILADELPHIA -- Two days before he was scheduled to accept his party's nomination at the Democratic National Convention, Sen. John Kerry addressed several thousand enthusiastic supporters who braved the rain to attend a rally on the steps of the Philadelphia Art Museum.

Neither the weather, which improved shortly before Kerry's arrival, nor long security lines dampened the carnival atmosphere of the rally, which featured balloons, music and an unexpected post-speech fireworks display.

Kerry apologized for not running up the museum steps in the manner of the fictional boxer "Rocky," but promised a "knockout punch" in November and made numerous references to the city as the birthplace of independence.

David Singer, 58, a Vietnam-era veteran of the U.S. Naval Reserve from Cherry Hill, N.J., hurried from a training session in Minnesota to attend the rally. Chief among his concerns, he said, are the benefits and rights of veterans.