Par Pharmaceutical Inc., one of the first companies to face criminal charges two years ago in a long-running probe of the generic drug industry, has been charged with 10 new felony counts by federal prosecutors in Baltimore.
A criminal information filed last week in U.S. District Court charged Par with five false-statement counts, four counts of using unapproved ingredients in generic drugs and one count of obstructing a Food and Drug Administration inspection.
The company has agreed to plead guilty to all 10 charges and pay a $2.5 million fine over the next three years, says Kenneth I. Sawyer, president of Par's parent company, Pharmaceutical Resources Inc.
"We are pleased that this agreement will bring to a close the government's criminal investigation of Par," says Sawyer. "I quite clearly deplore the acts" that led to the new charges.
Sawyer was named president of the company shortly after the criminal offenses ended in 1989. He fired nearly all of Par's officers, installed his own management team and instituted internal safeguards to prevent further criminal activities.
The latest charges date back to the old management, a fact that both Sawyer and a federal prosecutor emphasized. The offenses occurred between March 1986 and July 1989.
The Spring Valley, N.Y., company and Quad Pharmaceuticals Inc. of Indianapolis, a Par subsidiary, paid a total of $400,000 in fines in related cases last year for paying bribes to officials in the FDA's Division of Generic Drugs. Two executives of the companies also were convicted and fined.
"Two times is enough for any company," Sawyer says.
"This case is unusual in that, when the current management came in, we didn't know it [the criminal activity] was there. So the investigation had to be conducted by both sides," he says.
Sawyer credits FDA investigators and federal prosecutors for "professional handling" of the Par probe, and for being sensitive to the new management's attempts to rebuild the company's reputation in the shadow of pending prosecution.
According to the 18-page charging document, Par submitted applications to the FDA asking permission to market five drugs, but lied about ingredients that the drugs contained.
The company also used unapproved ingredients or deviated from approved manufacturing methods in producing four other drugs, the charging document says.
One count charges that Par changed its formula for a generic hypertension drug to one that had not been FDA-approved, but employees concealed the change by giving FDA inspectors tablets from the approved formula when they came to gather samples for testing.
No individual defendants are named in the new charges. Gary P. Jordan, an assistant U.S. attorney who is lead prosecutor in the long-running FDA probe, says the new charges against Par end the government's investigation of the corporation, but other charges are expected to be filed against individuals.
In another development tied to the generic drug probe, the U.S. 4th Circuit Court of Appeals in Richmond, Va., affirmed the perjury convictions of Dr. Marvin Seife, former director of the FDA's Division of Generic Drugs, in a decision issued Nov. 18.