Par Pharmaceutical Inc., the generic drug maker, pleaded guilty to marketing its AIDS drug, Megace ES, illegally and has agreed to pay $45 million to resolve federal criminal and civil investigations in New Jersey.
The company has been the subject of a U.S. Department of Justice inquiry into its marketing and sales of the drug, Megace ES, used for the improvement of HIV and cancer patients’ appetites.
In entering the plea in federal court in Newark, New Jersey, Chief Executive Officer Paul Campanelli admitted that Par sold Megace ES for uses not approved by the U.S. Food and Drug Administration (FDA). While the FDA did approve the drug for treatment of anorexia and unexplained weight loss in AIDS patients, Par actively marketed and promoted the drug for “off-label” uses, he said.
Par carried out marketing strategies by “asking prescribers to convert all of their geriatric patients from Megace OS to Megace ES, while knowing that many of those patients did not have AIDS,” Campanelli admitted.
Par admitted marketing Megace ES for older patients who do not have AIDS. They falsely promoted this drug as being more effective than other products, misbranding Megace ES, which is in violation of the Food, Drug and Cosmetic Act.
The United States further 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 launch, Par was allegedly aware of adverse side effects associated with the use of this drug in elderly patients, including increased risk of deep vein thrombosis (blood clots), toxic reactions in elderly patients with impaired renal function, and even death.
“To maximize sales, Par promoted the use of Megace ES for the treatment of non-AIDS-related geriatric wasting,” according to a charging document known as criminal information. “Members of the Par sales force knew that they were calling on very few nursing homes that actually had AIDS patients.”
Par will pay $22.5 million in the criminal case and another $22.5 million to settle civil claims that it falsely billed Medicare and Medicaid. The FDA imposes a long approval process for new drugs or new uses of drugs.
In addition, the U.S. alleged that Par made misleading representations about Megace ES’ superiority over its generic drug for elderly patients to encourage providers to switch patients from the generic brand to their Megace ES, even though no well-controlled studies were ever conducted to prove its superior effectiveness over the generic.
In addition to Par signing a five-year corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services, Par also settled three lawsuits filed by whistle-blowers under the False Claims Act. The law allows citizens to sue on behalf of the government and share in any recovery. Two of the whistle-blowers will get $4.4 million.
The plea agreement and corporate integrity agreement include provisions that require Par to change the way they conduct business. The agreements prohibit Par from compensating sales representatives or their managers based on the volume of sales of Megace ES. Under the agreement, Par is also required to change its executive compensation program to permit the company to recoup annual bonuses from covered executives if they, or their subordinates, engage in significant misconduct.
Many drug makers in the past decade have paid billions of dollars in fines for off-label marketing. U.S. law allows physicians to prescribe drugs to their patients for any reason, however, pharmaceutical companies can only market their drugs for uses for which they have been approved.
Par, based in Woodcliff Lake, New Jersey, was purchased in September by private equity firm, TPG Capital LP for $1.9 billion.
Par showed that their priority was the pursuit of more sales and greater profits– even at the cost of patient’s lives. How low can they go, taking advantage of sickly, elderly patients, some of which already are placed in Hospices, living out the last few weeks of their lives? Par was paying their employees bonuses based on the volume of sales for something that is not even FDA approved and carries serious adverse side effects, including death.
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