A settlement has been reached in a whistleblower class action lawsuit brought against KV Pharmaceutical Company, which was the St. Louis-based parent company of now-defunct Ethex Corporation. Ethex Corporation was accused of failing to advise the Centers for Medicare and Medicaid Services (CMS) that two unapproved products did not qualify for coverage under federal health care programs.
According to the terms of the settlement, the federal share is $10,158,695, and the state Medicaid share is $6,841,305. The whistleblower will receive a total of $1,523,804 from the federal share and additional amounts from the state share.
Originally filed in August 2002, the United States alleged that Ethex misrepresented the regulatory status of a pair of drugs, Nitroglycerin Extended Release Capsules (Nitroglycerin ER) and Hyoscyamine Sulfate Extended Release Capsules (Hyoscyamine ER), and failed to advise CMS that these unapproved drugs did not qualify for coverage under federal health care programs. As a result, the government contends, Ethex knowingly caused false claims to be submitted for Nitroglycerin ER and Hyoscyamine Sulfate ER. Ultimately, neither drug ever received full regulatory approval for safety and effectiveness, and neither product is currently on the market.
