K-V Pharmaceutical Company Comments on Recent Settlement with the Department of Justice
St. Louis, MO – December 7, 2011 – K-V Pharmaceutical Company (NYSE: KV.A/ KV.B) (the “Company” or “K-V”), today commented on the settlement of false claims allegations with the U.S. Department of Justice (“DOJ”) associated with the Company’s former ETHEX generic pharmaceutical subsidiary.
In connection with a multi-defendant action captioned United States ex rel. Constance Conrad v. ETHEX Corp., et al., No. 02-11738-RWZ (D. Mass.), K-V has agreed to pay a total of $17 million over five years to resolve False Claims Act allegations raised by the government that ETHEX, the Company’s former generic pharmaceutical subsidiary, allegedly failed to advise the Centers for Medicare and Medicaid Services (CMS) that two products -- Nitroglycerin Extended Release Capsules (Nitroglycerin ER) and Hyoscyamine Sulfate Extended Release Capsules (Hyoscyamine ER) -- purportedly did not qualify for coverage under federal health care programs. K-V admitted no wrongdoing in settling the matter. The settlement includes a multi-year payment schedule with nominal near-term capital requirements.
“We are satisfied with the settlement terms and the resolution of a legacy issue associated with our former ETHEX subsidiary,” stated Greg Divis, Chief Executive Officer of K-V. “The agreed terms include a reasonable five-year payment schedule, with less than $1 million to be paid within the first year. We are also pleased that the government deemed our current operations and compliance function sufficiently robust as to not require a corporate integrity agreement. The closure of this matter is another step forward as K-V moves ahead as a women's healthcare focused branded specialty pharmaceutical company.”
About K-V Pharmaceutical Company
K-V Pharmaceutical Company is a specialty branded pharmaceutical company with a primary focus in the area of women’s healthcare. As such, we are committed to advancing the health of women across all the stages of their lives.
For further information about K-V Pharmaceutical Company, please visit the Company’s corporate Website at www.kvpharmaceutical.com.
Cautionary Note Regarding Forward-looking Statements
This release contains various forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 (the “PSLRA”) and which may be based on or include assumptions concerning our operations, future results and prospects. Such statements may be identified by the use of words like “plan,” “expect,” “aim,” “believe,” “project,” “anticipate,” “commit,” “intend,” “estimate,” “will,” “should,” “could,” “potential” and other expressions that indicate future events and trends.
All statements that address expectations or projections about the future, including, without limitation, statements about product launches, governmental and regulatory actions and proceedings, market position, revenues, expenditures and the impact of the recall and suspension of shipments on revenues, adjustments to the financial statements, the filing of amended SEC filings, and other financial results, are forward-looking statements.
All forward-looking statements are based on current expectations and are subject to risk and uncertainties. In connection with the PSLRA’s “safe harbor” provisions, we provide the following cautionary statements identifying important economic, competitive, political, regulatory and technological factors, among others, that could cause actual results or events to differ materially from those set forth or implied by the forward-looking statements and related assumptions. Such factors include (but are not limited to) the following: