Failure to notify FDA costs KV $27.5 million
ST. LOUIS — KV Pharmaceutical Co., of Brentwood, was ordered Tuesday to pay $27.5 million in fines and restitution for failing to notify regulators about problems with two of its drugs.
It was part of a plea agreement first reported by the Post-Dispatch last week and finalized in U.S. District Court in St. Louis.
KV has faced various legal problems over the past two years, including dozens of drug recalls and a shutdown of manufacturing.
Assistant U.S. Attorney Andy Lay said the company attempted to defraud or mislead when it failed to notify the FDA of problems discovered with two of its oversized tablets — dextroamphetamine and propafenone.
Drug manufacturers are required to notify the FDA within three days if they find significant problems with an approved drug.
Dextroamphetamine is an ingredient in the attention-deficit hyperactivity disorder drug Adderall. Propafenone is used to treat cardiac arrhythmia, or irregular heartbeats.
KV profited about $11 million from the crime, Lay said in the hearing. The company will have to repay more than $1.7 million to the federal Medicare program and $573,000 to Medicaid as part of the deal.
"Consumers can and should expect safe and effective drugs from pharmaceutical companies," U.S. Attorney Richard Callahan said in a written statement.
"We hope today’s events put KV on track for a compliant and productive future creditreport."
The company has said it will shutter its generic drug unit, Ethex, because the plea agreement will probably exclude the subsidiary from future government programs.
The FDA’s actions followed a series of recalls in 2008 and early 2009, some of which involved oversized tablets that could have led patients to overdose accidentally.
As a result of those recalls, KV ceased all production in January 2009. Two months later, the company entered into a consent decree with prosecutors that prohibits KV from manufacturing until it meets FDA regulations.
KV said it would continue to work with the FDA to get its products back on the market. The settlement does not restrict the company from manufacturing generic drugs that comply with FDA regulations, the company said.
Meanwhile, drugstore chain CVS is suing KV for allegedly breaking a supply contract.
CVS claims KV owes it at least $100 million for failing to supply certain drugs beginning last year, according to a complaint filed Friday in federal court in Providence, R.I.
Bloomberg News contributed to this report.
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