Par fined $2.5 million in drug case Drug-maker pleads guilty to 10 charges.

December 06, 1991|By Kelly Gilbert | Kelly Gilbert,Evening Sun Staff

Generic drug-maker Par Pharmaceutical Inc. pleaded guilty today to 10 criminal charges and agreed to pay $2.5 million in fines over three years for corrupt acts tied to its former management.

Company president Kenneth I. Sawyer entered the pleas to Judge John R. Hargrove for the company in U.S. District Court in Baltimore.

Par had pleaded guilty to other criminal charges involving the company and one of its subsidiaries less than two years ago, and paid $400,000 in fines then.

Today's fine is the second-largest imposed on any of the five companies among 31 defendants to be charged so far in a continuing federal investigation of corruption in the generic drug industry and the Food and Drug Administration. Bolar Pharmaceutical Co. paid a $10 million fine in another case early this year.

Sawyer emphasized that the company's crimes were committed by former management that he has replaced.

He viewed today's punishment as "necessary," but called it "an excruciating process for those who stayed behind" to operate the Spring Valley, N.Y.-based company.

Two years ago, when Par was one of the first generic drug companies identified in the federal probe, it had 170 products on the market and

more than $100 million a year in sales. Today, Par markets about 80 products and is fighting to regain its lost stature in the industry.

Prosecutor Gary P. Jordan said the new charges against Par "showed that with the previous management, fraud was endemic."

Par's fine was half the amount that could have been imposed, but Jordan said it was "sufficiently punitive" because the company has been forced to take many of its products off the market, and faces private lawsuits and difficulties with other government agencies due to its criminal convictions.

Specifically, the company pleaded guilty to five false statement charges, four counts of using unapproved ingredients in its generic drugs and one count of obstructing an FDA inspection. The charges were connected to hypertension, chemotherapy and pain-killer drugs, along with medicines used to treat psychological disorders and diabetes.

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