Ex-CEO Fined $1M For Misbranding Drugs

Former chairman and CEO of KV Pharmaceutical Co. was fined $1 million after pleading guilty to two federal counts of misbranding drugs.

ST. LOUIS (AP) -- The former chairman and CEO of St. Louis-based KV Pharmaceutical Co. was fined $1 million after pleading guilty Thursday to misdemeanor counts related to manufacturing oversized tablets of a pain-relief drug called morphine sulfate.

Marc S. Hermelin, 69, also was sentenced to a month in prison after pleading guilty to two federal counts of misbranding drugs. He also agreed to forfeit $900,000 to the federal government.

"FDA's drug-labeling laws and regulations are designed to ensure that Americans can safely consume effective drug products," said Patrick Holland, the agent in charge of the Food and Drug Administration's Office of Criminal Investigations. "We will continue to work with the U.S. Attorney's Office and the Department of Justice to investigate those companies and individuals who participate in the distribution of misbranded drugs."

Calls seeking comment from the company went unanswered Thursday.

KV Pharmaceutical manufactured generic prescription drugs, including morphine sulfate, a pain relief and opiate drug. Prosecutors said Hermelin decided to increase production of the drug, from an average 4.1 million daily doses in 2006 to 10.6 million in April 2008.

Later in 2008, the company shipped oversized tablets to retailers in California and Canada that were falsely labeled as having the same strength as the regular morphine sulfate tablets -- they actually had more of the active ingredient. KV also received complaints from consumers concerned about oversized and irregularly-shaped drug tablets, the U.S. Attorney's office in St. Louis said.

Prosecutors said the California morphine tablets weighed more than twice the amount they were supposed to, and the Canada morphine tablets were 65 percent stronger than the label claimed. KV's own safety assessment from May 2008 concluded that oversized morphine tablets raised potential safety concerns, including the possibility of an overdose that could cause a coma or death.

KV does not currently manufacture morphine sulfate tablets. Since March 2009, KV has been under a civil consent decree that regulates its ability to manufacture drugs.

Hermelin resigned from KV's board in November. He was removed as chief executive in December 2008 following an investigation into mismanagement by the board.

A wholly-owned subsidiary of KV, Ethex Corp., pleaded guilty in March 2010 to two felony fraud counts as part of the same investigation. Ethex was ordered to pay $27.6 million in fines and restitution.

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