The drug, Megace ES, was approved by the Food and Drug Administration to combat "wasting" or dangerous weight loss that occurred with AIDS victims, the (Newark, N.J.) Star-Ledger reported Wednesday.
In 2005, just as their research and development investment in the drug was about to come to fruition, however, other treatment approaches beat Par Pharmaceutical to the punch and projected sales of the drug were lowered dramatically, the newspaper reported.
To recoup their investment, the drug maker began marketing Megace ES to combat weight loss among geriatric patients, even though that use was not approved, prosecutors said.
After a dragged out legal dispute, Par threw in the towel Wednesday, signing off on a deal that includes a $45 million payment to settle the case concerning a drug that netted the company $11 million.
The company will also be subject to vigorous scrutiny by the Department of Health and Human Services for the next five years, the newspaper said.
In the deal, the company executives will have to forfeit bonus pay if future malfeasance is discovered.
Company sales representatives are also banned from receiving "incentive compensation" for sales of the drug or from any spinoff product, the newspaper said.
U.S. Attorney Paul Fishman, said there were no known cases of harm the drug may have caused the elderly, but that was "not a risk that we should have to run."
Timothy McInnis, an attorney for two former company sales representatives, Michael McKeen and Courtney Combs, said in a statement that his clients would split $4.4 million of the settlement earmarked for whistle-blowers.