U.S. Seizes Unapproved Medicines at KV Pharmaceutical


St. Louis Post-Dispatch
July 31, 2008 - Federal agents on Tuesday announced that more than $24 million in unapproved pharmaceuticals had been seized from a local company after concerns surfaced over ingredients.

The medications have been on hold at KV Pharmaceutical Co.'s facilities in Bridgeton since this spring, after inspections by agents from the Food and Drug Administration and Missouri Department of Health and Senior Services discovered that Brentwood-based KV had been manufacturing products that had not been approved by the Food and Drug Administration, U.S. Attorney Catherine Hanaway said.

Hanaway said the products were on the loading docks, "ready to go" when officials stepped in. The products, still sitting on the docks but now taped off and under federal control, will be destroyed if a federal judge gives the OK.

In a statement, KV characterized the seizure as "inventory disposal" that would conclude "previously disclosed discussions with the FDA."

Earlier this year, KV said in a regulatory filing that the "hold" was related to the "misinterpretation about the intended scope of recent FDA notices setting limits on the marketing of unapproved guaifenesin products."

Guaifenesin is an expectorant that is often used in cold and allergy medicine to loosen phlegm and help alleviate chest congestion.

The company discontinued some products but not enough, judging by the FDA hold, the filing said.

KV also said the FDA had expanded the hold to include other products being marketed under "'grandfather clauses and statutory and regulatory exceptions."

Many of the products are cough and cold medicines that contain guaifenesin, Hanaway said. Some other seized products are medicated ointments, she said.

Last year, the FDA said companies needed approval for the use of guaifenesin in time-release cold medicines. The agency also warned that enforcement actions could occur if companies kept manufacturing or shipping those products.

The move decimates KV's generic cough-and-cold product line, which accounted for $38.5 million in sales during most of the fiscal year ended March 31, company filings show.

KV said it will stop manufacturing and selling approximately 29 of the 30 drugs in that product line, since none of them have received FDA approval.

The remaining product brought in sales of $884,000 during fiscal 2008.

In addition, KV in March wrote off $5.5 million in the value of the products and ingredients subject to the FDA's action.

Both KV and Hanaway said a recall of products already in stores was unlikely. Hanaway said that officials were not aware of any immediate health risks and said that the products had simply not been tested and could be less effective or may not work at all.

She also said that there were no criminal charges involved and that the action was "entirely a civil matter," although the company could face fines.

KV has been doing well financially, with net revenue growing at a 19 percent compound annual rate between fiscal years 2003 and 2008, when that figure hit $601.9 million. Its gross profit in fiscal 2008 was $415.3 million, up from $152 million five years earlier.

Its competitive edge is innovation--KV specializes in bringing new technologies to old-line drugs that were developed by other firms. KV adds a feature such as time-release dosing, a flavored coating, or the ability to quickly dissolve in the mouth to distinguish its generic drugs.

Hanaway could not speculate as to the cost, either in time or money, of getting the drugs approved. But she said KV could have had a "competitive advantage" compared to a company that went through the approval process.

rpatrick@post-dispatch.com, 314-621-5154

rmelcer@post-dispatch.com, 314-340-8394



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