KV Pharmaceutical to Pay $17 Million for Unapproved Drug Reimbursement

KV Pharmaceutical Company, the St. Louis parent corporation of the now defunct Ethex Corporation, has agreed to pay $17 million to the federal and state governments to resolve allegations that Ethex fraudulently received reimbursement for two of its drugs from federal healthcare programs. According to allegations made by relator Constance Conrad in U.S. ex rel. Conrad v. Ethex Corporation, et al., No. 02-11738-RWZ (D. Mass.), Ethex submitted false quarterly reports to the Center for Medicare and Medicaid Services (CMS) regarding the qualification for two of its drugs for federal health care reimbursement. Although the active ingredients in the drugs, Nitroglycerin ER, and Hyoscyamine Sulfate ER, had been in products on the market for a number of years, the FDA had previously decided that those drugs were ineligible for reimbursement by federal healthcare programs. Nevertheless, the U.S. alleges that Ethex deliberately mislead the government regarding the eligibility of those drugs for federal healthcare reimbursement. Under the terms of the settlement, the U.S. will receive $10,158,695, and the state Medicaid programs will receive $6,841,305. For her role in bringing the fraud to light, Conrad will receive a share of $1,523,804.

For more information see: http://www.justice.gov/opa/pr/2011/December/11-civ-1579.html