Par Pharmaceutical: An AIDS Indication and a Nursing Home Sales Campaign

Par Pharmaceutical agreed to pay $22.5 million to settle allegations that its off-label Megace marketing to nursing homes caused false claims to federal health care programs. The government alleged that Par built a sales force to target elderly nursing-home residents with weight loss, whether or not they had AIDS.

The Justice Department announced the resolution on March 5, 2013. The case shows how manufacturer influence over nursing-home prescriptions can reach a government bill. The civil allegations followed the promotion from the manufacturer’s sales force to the providers encouraged to prescribe the drug, and then to claims for uses federal programs did not cover.

What Par Allegedly Promoted to Nursing Homes

Megace ES is a megestrol acetate drug product that the FDA approved to treat anorexia, cachexia, or other significant weight loss in patients with AIDS. The Justice Department’s account of the civil allegations described a long-term-care sales force aimed at elderly nursing-home residents with weight loss, including residents without AIDS.

The government alleged that Par encouraged providers to switch elderly patients from generic megestrol acetate to Megace ES by making unsubstantiated and misleading claims that its product worked better. It said Par had conducted no well-controlled studies supporting greater efficacy. The alleged pitch gave providers a reason to change the prescription without the studies to support that reason.

The government also alleged that Par knew of adverse effects associated with megestrol acetate in elderly patients. It identified increased risk of deep vein thrombosis, toxic reactions in elderly patients with impaired kidney function, and mortality. The alleged campaign put the sales pitch ahead of the risks to elderly residents, and sent taxpayers the bill for uses their programs did not cover.

For someone who reviewed promotional materials or answered clinical questions from the field, the important comparison is what sales representatives were told to promise and what the supporting studies actually showed. We examine that comparison alongside the patient population the campaign targeted.

The Civil Settlement Covered Claims Caused by Promotion

Par’s civil agreement required payment to the federal government and various states. It resolved allegations that the company caused false claims by promoting Megace ES for uses that lacked FDA approval and federal healthcare program coverage.

The settlement resolved three qui tam cases brought under the False Claims Act in the District of New Jersey. The civil case centered on what Par allegedly caused providers to prescribe and federal programs to pay for.

The California Research Bureau’s report Fraud and Abuse in the Health Care Market of California, published in 1997, argued that fraud can arise across the health care market, beyond the provider submitting a bill:

That broader view matters here. Par’s alleged role began with the sales message that encouraged the prescription. The government pursued the manufacturer for causing claims for uncovered uses. A sales or clinical-review employee may know why a prescription changed even when someone else handled the bill.

When the Drug Switch Serves the Seller

The Omnicare drug-switching case shows another way commercial incentives can reach a nursing-home prescription. The government alleged that the long-term-care pharmacy received payments from Amgen tied to switching Medicaid beneficiaries from a competing drug to Aranesp. Those alleged payments included performance rebates and consulting payments.

The whistleblower’s complaint described what that pressure looked like to the nursing homes:

In the Par allegations, the sales force offered an unsupported claim of better results. In the Omnicare allegations, payments rewarded switches. Both accounts put a commercial reason behind a recommendation presented to a prescriber. For an insider reviewing a drug-switching campaign, the clinical message and the financial incentive belong in the same conversation.

The Sales Incentives the Agreement Changed

Par also agreed to a five-year corporate integrity agreement with the Department of Health and Human Services’ Office of Inspector General. Its terms reached the compensation of sales representatives, sales managers and covered executives, as well as internal and independent external monitoring.

The agreement prohibited compensation for sales representatives or their managers based on the volume of Megace ES sales. It extended that restriction to any branded successor megestrol acetate drug.

Par also had to change its executive compensation program to permit recovery of annual bonuses from covered executives if they or their subordinates engaged in significant misconduct. The agreement also called for increased transparency and monitoring by both company reviewers and independent outside reviewers.

What Evidence Is Needed to Prove Fraud?

For a Megace promotion case, useful evidence connects the sales message to the prescription and the government claim. We examine who approved the message, what clinical support they had, which providers received it, and how the promoted use reached a payment request.

A sales employee may know how the company chose the providers it approached. A clinical or medical-review employee may know whether the evidence supported what representatives said about the drug. A pharmacy or billing employee may know which product was dispensed, the resident’s treatment, and the program billed. Those are different views of the same alleged chain of decisions. The work is connecting them to particular prescriptions and claims.

For a suspected promotion scheme, we trace the actual prescription, dispensing record, supplier arrangement and payer. Your knowledge may sit in the marketing department, the pharmacy or the nursing home. Our work brings the relevant decisions and records together.

What Is the Reward for a Medicare Fraud Whistleblower?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. From Par’s civil settlement, the Justice Department announced a combined $4.4 million whistleblower reward for two of the whistleblowers who brought the cases.

You Know What the Sales Pitch Left Out

If you saw a nursing-home drug campaign promise more than its clinical evidence supported, talk with our whistleblower experts. We build the case with you around the promotion, the prescriptions and the government payments, and bring in pharmaceutical fraud whistleblower lawyers who understand nursing-home drug marketing. We stay beside you as that inside knowledge becomes a case for recovery.