NEWARK, N.J. (AP) — A New Jersey-based drugmaker has pleaded guilty to criminal charges, for improperly marketing its weight-gain drug to frail seniors particularly vulnerable to its side effects.
Officials from Woodcliff Lake-based Par Pharmaceutical Cos. entered the pleas Tuesday in federal court in Newark, N.J., and agreed to pay a total of $45 million in fines.
Par’s CEO, Paul V. Campanelli, admitted the company improperly marketed its Megace ES drug for treating anorexia and malnutrition in nursing home residents and dying hospice patients even though they did not have AIDS. The drug is only approved for helping AIDS patients gain weight.
The Justice Department began investigating after four different whistleblowers went to attorneys with allegations about misconduct by Par’s sales force for the drug.
Along with illegally encouraging physicians to prescribe the drug for elderly patients for whom its use was not approved, a practice known as off-label marketing, Par was accused of filing false claims for reimbursement by federal health programs. That’s because prescriptions were being billed to programs such as Medicare for elderly patients who didn’t have AIDS.
The illegal marketing occurred for several years, starting shortly after the drug was approved for U.S. sales in 2005, according to attorney Timothy J. McInnis. He represents two of the whistleblowers, both sales representatives who worked for Par until they left in early 2009, shortly before the company became aware of their actions.
“Par’s Megace ES marketing to hospice physicians represents the ultimate in off-label insanity,” McInnis said. “Patients are admitted to hospices when their conditions are terminal, where medical staff helps them die in peace and dignity. Par, instead, saw them as an opportunity for easy money.”
Paul J. Fishman, U.S. Attorney for the District of New Jersey, said Par started the improper marketing after HIV treatment in this country began to change, so far fewer HIV patients were becoming emaciated and needed medication to gain weight.
“The company, which had invested time and resources in this drug, found itself in a position that it was no longer of use,” Fishman said. “So, it turned to other uses and marketed it aggressively.”
“I think it’s terrible when companies cheat Medicare or Medicaid, but the real issue here is patient safety,” Fishman added. “It made them (Par) a lot of money they wouldn’t have made if they had marketed this drug only for its approved uses.”
Fishman said federal prosecutors didn’t know how many people had been incorrectly prescribed the drug, and there are no allegations that anyone was harmed. However, Megace has significant side effects, ranging from death and life-threatening blood clots to high blood pressure and worsening of diabetes.
Par agreed to pay an $18 million fine for the criminal charges, $4.5 million in criminal forfeiture and $22.5 million in civil fines.
The company agreed to be acquired in July for about $1.84 billion in cash by an affiliate of private investment firm TPG.
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AP Business Writer Linda A. Johnson contributed from Trenton, N.J.
