Par Pharmaceuticals Settles False Claims Act Suits Alleging Off-Label Marketing

March 20, 2013 — Par Pharmaceutical Companies Inc. has pleaded guilty and consented to pay $45 million to settle criminal and civil charges involving the New Jersey drug maker’s promotion of Megace ES for uses that the Food and Drug Administration (FDA) has not approved and that are not covered by Medicare, Medicaid or any other federal healthcare program. According to the Justice Department, the agreement resolves three separate whistleblower lawsuits filed under the False Claims Act. The statute allows government collaborators to file suit on behalf of the United States and then share in any recovery. In this case, in which Par agreed to settle its civil liability under the False Claims Act for $22.5 million, two of the three informants will split $4.4 million.

Megace ES is a drug that the FDA has approved for treating AIDS patients with serious weight loss, such as anorexia or cachexia. The drug was not approved by the FDA for use in geriatric patients, nor did the drug’s label contain adequate directions for use with elderly patients experiencing weight loss. Nevertheless, Par allegedly targeted senior nursing home patients as potential drug users, even though Par is said to have known that Megace ES had several serious side effects for elderly users, including renal dysfunction, deep vein thrombosis and death. Par allegedly attempted to persuade physicians to switch to Megace ES for geriatric patients by making claims that were unsubstantiated.

The federal Food, Drug and Cosmetic Act (FDCA) requires pharmaceutical companies to specify the intended uses of their drugs when they apply for approval from the FDA. It is illegal for a drug maker to distribute drugs in interstate commerce for “off-label” uses — those that have not been approved by the FDA. Further, Medicare and Medicaid do not reimburse for drugs that are prescribed for off-label uses. As a result, it is a violation of the False Claims Act to submit a claim for payment to Medicare for the prescription of a drug that will be used for unapproved purposes.

Insider Employees Notify Government of Medicare Fraud

False Claims Act violations involving off-label drugs are frequently reported by pharmaceutical sales representatives or other company insiders who recognize the illegality of marketing drugs for uses that the FDA has not approved. Before stepping forward, whistleblowers deserve to know their own rights. The lawyers at Waters & Kraus offer informants the aggressive legal representation they need in the battle against health care fraud. Contact us or call our pharmaceutical fraud attorneys at 800.226.9880 to learn more about how we can protect and advance your interests.

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