Par Pharmaceutical Companies, Inc. (“Par”), based in Woodcliff Lake, New Jersey, pleaded guilty in federal court and agreed to pay $45 million to resolve allegations that it promoted the prescription drug Megace ES for off-label uses not approved by the Food and Drug Administration (“FDA”). Par’s CEO Paul Campanelli pleaded guilty on Par’s behalf in Newark federal court to a criminal misdemeanor charge for misbranding Megace ES in violation of the Federal Food, Drug and Cosmetic Act. U.S. Magistrate Judge Madeline Cox Arleo fined Par $18 million and ordered it to forfeit $4.5 million.
The FDA approved Megace ES for the treatment of anorexia, cachexia, or other significant weight loss in patients afflicted with AIDS. The government alleges that Par criminally misbranded Megace ES because the FDA-approved label did not include sufficient directions for use in the treatment of non-AIDS related geriatric wasting, a use that was not approved by the FDA.
In addition to the criminal charges, three whistleblower lawsuits had been filed under the qui tam provisions of the False Claims Act. The whistleblowers alleged that Par caused false claims to be submitted to Medicare and other federally funded health care programs for the use of Megace ES to treat conditions that were not FDA-approved. Specifically, the government alleged that Par targeted sales of Megace ES to elderly nursing home patients suffering from geriatric wasting, whether or not the patients also had AIDS. In addition, the government alleged that Par made unsubstantiated and misleading claims concerning the effectiveness of Megace ES over other similar medications to encourage providers to prescribe Megace ES.
Par agreed to pay $22.5 million to resolve the False Claims Act lawsuits. Of the settlement amount, the whistleblowers will collectively receive $4.4 million as their reward under the qui tam provisions of the False Claims Act.