As per the terms of the settlement, Ethex will plead guilty to criminal charges, and will be required to pay a fine and restitution of $25.8m. Ethex also will not contest an administrative forfeiture of $1.8m.
Under the terms of the settlement, Ethex’s payment of $25.8m, includes $2.3m in restitution to the federal government. The amounts would be paid through a pre-determined schedule running through July 2012.
Ethex is expected to plead guilty to two felony counts of failure in 2008 to file Field Alerts for the drugs Dextroamphetamine and Propafenone. In light of the plea and likely exclusion of Ethex from government programs, the company has determined to cease operations of Ethex.
The company said that because pharmaceutical manufacturing is conducted by the parent company, KV, this settlement, if accepted by the court, would not restrict KV from a return to manufacturing its generic pharmaceutical products upon regaining compliance with cGMP in accordance with the company’s consent decree with the FDA.
Additionally, KV will also retain all related intellectual property, including all New Drug Applications (NDA’s) for brand drugs and Abbreviated New Drug Applications (ANDA’s) for generic drugs and the ability to conduct marketing and distribution of all of its previously approved products.
David Van Vliet, interim CEO of KV Pharmaceutical, said: “This settlement marks an important milestone in our efforts to restore normalized business operations at KV, regain full regulatory and legal compliance and set KV on a new path moving forward. Management and the Board have been working diligently to address this issue and we are looking forward to having this matter resolved. Looking ahead, we remain focused on 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.”