Attorney General Conway Announces Kentucky's Participation in $22.5M Settlement With Par Pharmaceutical

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Updated: 3/06/2013 10:34 am
FRANKFORT, Ky.  Attorney General Jack Conway announced today that Kentucky has joined with other states and the federal government in reaching a $22.5 million criminal and civil settlement with Par Pharmaceutical Companies, Inc. over allegations that the drug company promoted sales of the drug Megace ES (Megestrol Acetate) for uses not approved as safe and effective by the Food and Drug Administration (FDA), and not covered by state Medicaid programs.

Par, headquartered in Woodcliff Lake, New Jersey, manufactures and markets Megace, which had been approved by the FDA to relieve the symptoms and reduce the suffering caused by advanced breast and endometrial (uterine) cancer, and as an appetite stimulant to prevent malnutrition and severe weight loss in advanced cancer and acquired immunodeficiency syndrome (AIDS) patients. 

The states and federal government allege that Par was aware of severe adverse side effects associated with the use of Megace to treat elderly patients, but nevertheless launched a long-term marketing campaign that deliberately and improperly targeted elderly patients living in nursing homes with weight loss problems. These patients did not suffer from cancer, AIDS, or any other medically accepted condition that would warrant the use of Megace. The adverse side effects included risk of deep vein thrombosis (blood clots), cachexia (the loss of body mass that cannot be reversed nutritionally), toxic reactions in elderly patients with impaired kidney function and death.

To compound the problem, Par tried to encourage doctors to switch patients from the cheaper generic form of Megastrol Acetate to the more expensive Megace ES by making false and misleading statements that Megace ES was more effective, although Par had not conducted any well-controlled studies to support these claims. 

“This is another example of a drug company that has put profits ahead of patient care,” General Conway said. “I am pleased that we were able to work with our state and federal partners to recover money for the Medicaid program and for Kentucky taxpayers. This settlement will also ensure that Par does not engage in these illegal marketing activities in the future.”

As a result of the settlement, the Kentucky Medicaid program will receive more than $115,800, of which it will retain approximately $35,000 after reimbursing the federal government for its share. Par will also plead guilty to the criminal charge of improperly introducing a mis-branded drug into interstate commerce in violation of the Food, Drug, and Cosmetic Act. 

Finally, Par will be required to enter into a Corporate Integrity Agreement with the United States Department of Health and Human Services, Office of the Inspector General to ensure that these illegal marketing activities do not reoccur in the future. 

 Since Attorney General Conway took office in January 2008, his Office of Medicaid Fraud and Abuse Control has recovered or been awarded nearly $300 million dollars for the state and federal Medicaid programs.  These cases range from lawsuits and settlements against pharmaceutical companies to cases against individual providers.

 In 2012, General Conway's Medicaid Fraud Unit was named one of the most aggressive in the country by the nonprofit watchdog group Public Citizen.

The Attorney General’s Tip Line for reporting allegations of Medicaid fraud is 1-877-228-7384.

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