An example of the difficulty involved in prosecuting executives at repeat GMP-violator companies is the shenanigans taking place in a St. Louis court. KV Pharmaceutical ($KV.A) and former CEO Marc Hermelin have each brought suit against the other over who bears responsibility for manufacturing and regulatory reporting violations and their consequences.
Although federal prosecutors named Hermelin the "responsible corporate officer," he insists that board members above him and executives and management below him are to blame, says St. Louis Today.
KV's suit accuses Hermelin of trying to hide evidence of manufacturing problems from the board. The company wants the court to nullify an agreement obligating KV to pay legal fees and nearly $40 million in retirement benefits to the former CEO, according to the report.
Hermelin argues in his suit that KV has already reimbursed him $3.7 million for legal fees under an indemnification agreement. He's looking for an additional $1 million in fees.
The trouble began with the manufacture of oversized morphine tablets, some of which were found to contain double the standard dose of API. KV initiated a recall but neglected to inform the FDA of the additional discovery of oversize tablets in two other drugs: heart medication propafenone and attention-deficit disorder drug dextroamphetamine.
Hermelin says he was out of the country and had delegated the propafenone and dextroamphetamine recall decisions to fellow executive David Van Vliet and managers, who ultimately issued no callback of the overweight pills.
The 2008 missteps led to a manufacturing consent decree between the FDA and KV, a nearly two-year manufacturing shutdown, the shuttering of subsidiary Ethex and a ban on Hermelin doing business with the government for 20 years.
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