KV's Ethex to plead guilty to criminal charges

ST. LOUIS The generic drug marketing and distribution division of KV Pharmaceuticals will plead guilty to criminal charges and close shop under a deal between KV and the Department of Justice, KV announced Thursday.

The generic drug maker said Ethex will plead guilty to two felony counts and pay $27.6 million to resolve a criminal investigation of the company that began amid allegations that it failed to file field alerts to inform regulators of manufacturing problems with the drugs dextroamphetamine and propafenone in 2008. The payment includes a fine, $2.3 million in restitution to the federal government and an administrative forfeiture of $1.8 million.

“This settlement marks an important milestone in our efforts to restore normalized business operations at KV, regain full regulatory and legal compliance and set KV on a new path moving forward,” KV interim CEO David Van Vliet said in a statement. “Management and the board have been working diligently to address this issue, and we are looking forward to having this matter resolved.”

Ethex recalled a large number of generic drugs in late 2008 and early 2009 due to problems such as possibly oversized tablets and manufacturing deficiencies. In March 2009, the Food and Drug Administration filed an injunction against KV to prevent it from making or distributing adulterated and unapproved drugs and forced it to destroy all the drugs it had recalled, forbidding it from resuming manufacturing until the FDA was satisfied that it had been brought back into compliance with regulations. KV said the current settlement would allow it to continue manufacturing once it had regained compliance with the FDA’s current good manufacturing practices regulations, also known as cGMP.