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For Immediate Release

Media Contacts:

David Paulson, 410-576-6357

Alan Brody, 410-576-6956

AG Gansler: Settlement Ends Fraudulent Off-Label Marketing of AIDS Drug
Par Pharmaceutical pleads guilty to marketing Megace ES to elderly patients

Baltimore, MD ( March 11, 2013) - Attorney General Douglas F. Gansler announced today that Maryland, joined by multiple states and the federal government, has reached an agreement with Par Pharmaceutical Companies, Inc., to settle allegations that the drug manufacturer promoted sales of the drug Megace ES for uses not approved as safe and effective by the Food and Drug Administration (FDA) and not covered by the Maryland Medicaid Program.

"This deceitful scheme targeted some of Maryland's most vulnerable citizens - seniors and nursing home residents," said Attorney General Gansler. "The state will recover funds related to false Medicaid claims, but more importantly, we are protecting unsuspecting seniors from needless suffering and the sometimes-deadly side effects of this drug."

Par will pay the states and the federal government a total of $22.5 million dollars in civil damages to compensate Medicaid, Medicare and various federal healthcare programs harmed by the company's conduct. Maryland will receive $14,519.41 in restitution and other recovery.

In addition to the civil damages, Par pleaded guilty on March 5 in the U.S. District Court for the District of New Jersey to criminal misdemeanor charges for misbranding Megace ES in violation of the federal Food Drug and Cosmetic Act (FDCA). The company was ordered to pay $18 million dollars in fines and $4.5 million dollars in criminal forfeiture. The FDCA requires manufacturers 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 claims arising from Par's off-label marketing of Megace ES, a megestrol acetate drug product which was approved by the FDA to treat anorexia, cachexia or other significant weight loss suffered by patients with AIDS. It further resolves allegations that Par promoted the sale and use of Megace ES for other uses that were not FDA-approved and not covered by Medicaid, Medicare or other federal health care programs, which caused false claims to be submitted to these programs. The states and the federal government further alleged that Par deliberately and improperly targeted sales to elderly nursing home residents who experienced weight loss, regardless of whether 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 states and the federal government further 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. Except as admitted in Par's 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.

As a condition of the settlement, Par has entered into a Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services, Office of the Inspector General, which will closely monitor the company's future marketing and sales practices. In addition, the CIA prohibits Par from providing compensation to sales representatives or their managers based on the volume of sales of Megace ES and any branded successor megestrol acetate drug.

This settlement is based on three qui tam cases that were filed in the U.S. District Court for the District of New Jersey by private individuals who filed actions under state and federal false claims statutes.

A National Association of Medicaid Fraud Control Units team participated in the investigation and conducted settlement negotiations with Par on behalf of the settling states. Team members included representatives from Arizona, Florida, New York and Ohio.


Attorney General of Maryland 1 (888) 743-0023 toll-free / TDD: (410) 576-6372
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