Par Pharma to Pay $45M for Health Care Fraud, Whistleblowers to Get $4.4M

New Jersey-based Par Pharmaceutical Companies Inc. pleaded guilty in federal court yesterday and agreed to pay $45 million to resolve its criminal and civil liability in the company’s promotion of its prescription drug Megace® ES for uses not approved as safe and effective by the Food and Drug Administration (FDA) and not covered by federal health care programs, the Justice Department announced.   Par pleaded guilty to an Information charging it with a criminal misdemeanor for misbranding Megace® ES in violation of the Federal Food, Drug, and Cosmetic Act.  Par promoted the sale and use of Megace® ES for uses that were not FDA-approved and not covered by Federal health care programs, causing false claims to be submitted to these programs.  The DOJ alleged that Par deliberately and improperly targeted sales to elderly nursing home residents with weight loss 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.  In addition to the criminal and civil resolutions, Par also agreed to enter into a five-year Corporate Integrity Agreement with the Office of the Inspector General of the Department of Health and Human Services that requires enhanced accountability, increased transparency, and wide-ranging monitoring activities conducted by both internal and independent external reviewers. 

The settlement resolves lawsuits filed under the whistleblower provisions of the False Claims Act, which permit private parties to file suit on behalf of the United States and obtain a portion of the government’s recovery. The civil lawsuits were filed in the District of New Jersey.  As part of the settlement, the two whistleblowers, relators McKeen and Combs, will receive $4.4 million.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who uncover fraud of every kind perpetrated against our government including, health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.