The company pleaded guilty to a misdemeanor charge for
misbranding the drug Megace ES for uses not approved by the US Food and Drug
Administration, at a hearing before US Magistrate Judge Madeline Cox Arleo in
Newark, New Jersey.
Private equity firm TPG Capital LP bought Par for $1.9 billion
in September. Federal prosecutors said Megace ES was meant to treat anorexia
and other weight loss in Aids patients, but that Par deliberately promoted it
for off-label uses, such as for elderly nursing home residents who were losing
FDA didn’t give
permission to market drug
"The conduct of this company was in some real measure
flagrant," US Attorney Paul Fishman in New Jersey said in an interview at
his office. "The company was told on at least two occasions in 2005 that
it did not have permission from the FDA to market this drug as appropriate for
senior citizens, and it chose to ignore that. And it made the wrong
choice."Par and its lawyer did not immediately respond to several requests
Tuesday's settlement includes an $18 million
fine, a $4.5 million criminal forfeiture, and $22.5 million to resolve civil
litigation against the Woodcliff Lake, New Jersey-based company.It also
resolves three whistleblower lawsuits brought under the federal False Claims
Act, which lets private parties sue on behalf of the United States and share in
the government's recoveries.
Par also agreed to enter a five-year "corporate integrity
agreement" with the US Department of Health and Human Services. This
agreement requires the company to improve oversight, and permits it to take back
bonuses from executives who engage in significant misconduct.
The US Department of Justice announced the settlement and
the guilty plea, which it said was entered by Par Chief Executive Paul
Campanelli on the company's behalf. At a press conference, Fishman said he was
unaware of patients who may have been harmed by the improper off-label use of
Megace ES, but that this did not excuse Par's marketing.
"A company looking out too much for profits can lose
its perspective and its moral compass," Fishman said in the interview.
"And that places the public at risk."
marketing took place between 2005 and 2009
The alleged improper marketing took place between July 2005
and 2009, according to a court filing describing the government case over
Megace ES, whose chemical name is megestrol acetate.
Sales representatives and management at Par "knew that
they called on very few, if any, facilities with Aids patients and very few
practitioners that treated AIDS patients," the court filing said. Par also
held contests to spur Megace ES sales, awarding prizes such as Rolex watches
and trips to Cabo San Lucas in Mexico to successful sales representatives, the
Last September, the company said it had set aside $45
million for a possible settlement over Megace ES. The case is US v. Par
Pharmaceutical Cos, US District Court, District of New Jersey.