Walloped with $26M in fines, KV closes ETHEX

A combination of multimillion-dollar GMP-violation fines and the likely loss of government contracts have brought the ETHEX generic drug unit of KV Pharmaceutical to the end of the road. KV says it is ceasing the St. Louis subsidiary's operations.

ETHEX will plead guilty to two felony counts of failure to file safety-threat field alerts with the FDA in 2008 for the API Dextroamphetamine, used in the attention-deficit hyperactivity disorder drug Adderall, and for cardiac-arrhythmia treatment Propafenone. The company will pay fines of $25.8 million. ETHEX says it will not contest an administrative forfeiture of $1.8 million.

A Department of Justice consent decree prohibits KV Pharma and subsidiaries ETHEX and Ther-Rx from making and distributing adulterated and unapproved drugs, following a raft of recalls in 2009 and an FDA inspection in late 2008. Many of the recalls involved oversized tablets. The FDA seized more than $24 million in products following KV's continued production after an FDA-ordered halt.

The company last fall hired GMP expert Lachman Consultants to oversee a production overhaul. It remains positive publicly. CEO David Van Vliet says the company is "working alongside the FDA in accordance with our consent decree and demonstrating cGMP compliance so we can resume manufacturing and return our products to market."

ETHEX contributed more than 60 percent of KV's revenue in 2008.

- read KV's release

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