Skip to main content

KV Pharmaceutical Will Pay $17 Million to Settle Claims of Fraud on Federal Health Care Programs

By December 9, 2011July 16th, 2019Drug Safety

As a defective drug attorney, I’ve kept an eye on the problems plaguing St. Louis-area drug maker KV Pharmaceutical. The company’s Ethex subsidiary was permanently shut down in 2010 after officers pleaded guilty to knowingly allowing oversized, defective drugs to be sold, including drugs for which an accidental overdose could prove fatal. This grew out of a series of reported managerial problems at KV, which resulted in a series of drug recalls, a shutdown by the FDA, drastic management changes and lawsuits over both drug safety and corporate management. Now, the St. Louis Post-Dispatch reported Dec. 6, KV has agreed to pay $17 million to settle allegations of defrauding the federal government by lying about its eligibility for Medicare and Medicaid reimbursements.
The allegations are against the now-defunct Ethex subsidiary. That company is accused of exaggerating the regulatory status of two drugs: nitroglycerin extended-release capsules and hyoscyamine sulfate extended-release capsules. The FDA decided in the 1990s that both were ineligible for reimbursement from federal health care programs, and they never received full FDA approval. A whistleblower lawsuit in Boston federal court alerted the government to the deception, which was in false statements in quarterly reports submitted to the government. The $17 million settlement includes $10.2 million to the federal government and $6.8 million to the states. Of the federal money, $1.5 million will be paid to the whistleblower. The money will be paid out over five years. It comes nearly two years after Ethex was hit with $27.6 million in fines and restitution for failing to report the oversized drugs problem to the FDA.
As a dangerous drug lawyer, I’m pleased to see that the penalties are so steep for placing profit above patient safety. FDA approval is not just a technical hurdle. In order to be FDA-approved, drugs must pass several trials showing safety and efficacy in human patients. Even with approval, drug makers don’t always end up with a product free of defects. That’s one reason why the approval is mandatory for Medicare and Medicaid eligibility — because taxpayers should not be asked to subsidize risky, unproven drugs. The question is whether the $17 million, and the $26.7 million before it, are more money than Ethex and KV made from sales of their unsafe and deceptive products. Only if the penalty outweighs the profits can unethical drug makers be expected to change.
At Carey, Danis & Lowe, we focus our practice on defective and unsafe pharmaceuticals. Patients trust that their doctors wouldn’t prescribe drugs that are unsafe — but when doctors and the FDA aren’t aware of the safety problem, they can’t protect patients. That’s why Missouri and Illinois state laws give drug manufacturers a legal responsibility to ensure that their products are safe and free of obvious defects. When pharmaceutical companies fail in this duty, they can and should be held legally responsible for any injuries or illness to the people who placed their trust in the products. In a lawsuit, our pharmaceutical injury attorneys can help you claim compensation for your injuries, any permanent disability or wrongful death, all medical costs and any pain, suffering or other damages.

If you believe you were harmed by a prescription drug you thought would help you, don’t hesitate to call Carey, Danis & Lowe to discuss how we can help. For a free consultation, send us an email or call 1-877-678-3400 today.
Similar blog posts:
Troubled Missouri Drug Manufacturer Pulls Almost All Products From Market — Southern Illinois Drug Injury Law Firm
Eighth Circuit Allows Proposed Class Action for Drug Manufacturing Defects – LeFaivre v. KV Pharmaceutical et al.
Former Employee Alleges Drug Company Fired Him for Refusing to Validate Contaminated Drugs – Bazzi v. Tyco Healthcare Group