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New Jersey business litigation: Drug company makes deal with feds

Par Pharmaceutical Cos., a New Jersey based company, has decided to plead guilty to a federal charge of criminal misbranding. The plea reached in this business litigation involves millions of dollars in both civil and criminal penalties. The lawsuit surrounds the company's marketing of a drug originally designed to assist AIDS patients in gaining weight.

When the treatment regimen changed for AIDS patients, the drug Megace ES was no longer needed to combat weight loss that used to be common in AIDS patients. According to whistleblowers, Par Pharmaceuticals decided to aggressively market the drug to nursing homes and hospice physicians. The company marketed the drug for combating malnutrition and anorexia in elderly patients. Megace ES was never approved for this purpose and the federal government was made aware of the company's off-label marketing.

The company will pay a criminal fine in the amount of $18 million, a criminal forfeiture in the amount of $4.5 million and $22.5 million to settle the civil liability. In addition, the company will be bound by an integrity agreement with the federal government that will last for five years. The New Jersey U.S. Attorney's Office does not know how many patients were prescribed Megace ES incorrectly.

The federal government did not make any allegations that anyone was harmed as a result of the company's off-label marketing, but that does not mean that no one was injured as a result of being prescribed the medication. There are numerous side effects associated with the medication including the formation of blood clots that can be life-threatening and death. The medication has also been known to make diabetes worse in some patients. The federal lawsuit could be just the beginning of the company's business litigation should any patients incorrectly prescribed this medication have suffered serious injury as a result.

Source:, "NEWARK, N.J.: NJ drugmaker faces civil, criminal fines over drug," Samantha Henry and Linda A. Johnson, March 5, 2013

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