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Par Pharmaceutical Agrees to Pay $45 Million to Resolve Liability

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According to the Justice Department, Par Pharmaceutical Companies Inc. recently pleaded guilty and agreed to pay $45 million to resolve its liability for the promotion of prescription drug Megace ES “for uses not approved as safe and effective by the Food and Drug Administration (FDA) and not covered by federal health care programs.” The court fined Par $18 million and ordered $4.5 million in criminal forfeiture. Par also agreed to pay $22.5 million to resolve its civil liability.

The settlement resolves qui tam lawsuits that had been filed under the whistleblower provisions of the False Claims Act. As part of this resolution, the relators who brought these cases will receive $4.4 million.

According to the government’s press release, Par had been charged with misbranding Megace ES in violation of the Federal Food, Drug and Cosmetic Act. Specifically, Megace ES “was approved by the FDA to treat anorexia, cachexia, or other significant weight loss suffered by patients with AIDS. The Megace ES distributed nationwide by Par was criminally misbranded because its FDA-approved labeling lacked adequate directions for use in the treatment of non-AIDS-related geriatric wasting, a use that was intended by Par but never approved by the FDA. The FDCA requires companies such as Par to specify the intended uses of a product in its new drug application to the FDA. Once approved, a drug may not be distributed in interstate commerce for unapproved or ‘off-label’ uses until the company receives FDA approval for the new intended uses.”

The civil settlement resolves allegations that “Par, by promoting the sale and use of Megace ES for uses that were not FDA-approved and not covered by federal health care programs, caused false claims to be submitted to these programs.” The United States also alleged that Par “deliberately and improperly targeted sales to elderly nursing home residents with weight loss, whether or not such patients suffered from AIDS, and launched a long-term care sales force to market to this population. During this marketing campaign, Par was allegedly aware of adverse side effects associated with the use of megestrol acetate in elderly patients, including an increased risk of deep vein thrombosis, toxic reactions in elderly patients with impaired renal function, and mortality.”

The government also alleged that Par made “unsubstantiated and misleading representations about the superiority of Megace ES over generic megestrol acetate for elderly patients to encourage providers to switch patients from generic megestrol acetate to Megace ES, despite having conducted no well-controlled studies to support a claim of greater efficacy for Megace ES.”

The Justice Department press release reminds that, except as admitted in the plea agreement, “the claims settled by the civil settlement agreement are allegations only, and there has been no determination of liability as to those claims.”

John Sinatra is a partner in the Business Litigation Practice at Hodgson Russ LLP. You can reach him at jsinatra@hodgsonruss.com

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