KV Pharmaceuticals pays $17 million to settle qui tam over sales of unapproved drug

by Ben Vernia | December 6th, 2011

On December 6, the Department of Justice announced a settlement with KV Pharmaceuticals, of St. Louis, of a whistleblower’s suit. According to DOJ’s press release:

KV Pharmaceutical Company, which was the St. Louis-based parent company of now-defunct Ethex Corporation, will pay $17 million to resolve False Claims Act allegations that Ethex failed to advise the Centers for Medicare and Medicaid Services (CMS) that two unapproved products did not qualify for coverage under federal health care programs, the Justice Department announced today. Ethex is alleged to have submitted false quarterly reports to the government related to a pair of drugs, Nitroglycerin Extended Release Capsules (Nitroglycerin ER) and Hyoscyamine Sulfate Extended Release Capsules (Hyoscyamine ER).

Nitroglycerin ER is a single entity coronary vasodilator containing controlled release nitroglycerin that was used for treating angina pectoris (chest pain due to lack of oxygen supply to the heart muscle). Hyoscyamine Sulfate ER is an antispasmodic medication that has been used to treat various stomach, intestinal and urinary tract disorders that involve cramps, colic or other painful muscle contractions. While the active ingredients in Nitroglycerin and Hyoscyamine Sulfate ER had been in products on the market for many years, the Food and Drug Administration (FDA) made determinations in the late 1990s that resulted in the drugs being ineligible for reimbursement by government health care programs such as Medicaid.

The United States alleges that Ethex misrepresented the regulatory status of both drugs and failed to advise CMS that these unapproved drugs did not qualify for coverage under federal health care programs. As a result, the government contends, Ethex knowingly caused false claims to be submitted for Nitroglycerin ER and Hyoscyamine Sulfate ER. Ultimately, neither drug ever received full regulatory approval for safety and effectiveness, and neither product is currently on the market.

The government announced that of the approximately $10 million federal share, the relator will receive a 15% award, or approximately $1.5 million.

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