KV Pharmaceutical to pay $17 million settlement

KV Pharmaceutical Co. will pay $17 million to resolve allegations that a subsidiary submitted false quarterly reports and failed to advise the CMS that two unapproved drugs did not qualify for coverage.

Ethex Corp., a subsidiary of St. Louis-based KV Pharmaceutical that was dissolved in December 2010, misrepresented the regulatory status of two drugs, according to a news release from the Justice Department.

Neither nitroglycerin extended-release capsules, which were used to treat angina pectoris, nor hyoscyamine sulfate extended-release capsules, which were used for stomach, intestinal and urinary tract disorders, are currently on the market.

The Food and Drug Administration determined in 1997 that timed-release drugs, including hyoscyamine sulfate extended-release capsules, were new drugs and no longer qualified as a covered outpatient drug, making them ineligible for reimbursement. The U.S. Justice Department alleges that the company submitted false quarterly reports from 2000 to 2009 that misrepresented the drug’s regulatory status.

In 1999, the FDA found that nitroglycerin extended-release capsules lacked effectiveness. The government says that the company submitted false quarterly reports from 1999—when the drug was no longer eligible for federal payment or as a covered outpatient drug—to 2007.

KV Pharmaceutical denied the allegations in the settlement agreement. Calls to the company were not immediately returned.

“We are satisfied with the settlement terms and the resolution of a legacy issue associated with our dissolved Ethex subsidiary," a spokesman for KV Pharmaceutical said in a statement.