|
|
|
|
|
|
|
|
 |
|
|
|
|
|
On July 30th, St. Louis news media reported that federal officials “raided” KV Pharmaceutical to seize “more than $24 million in unapproved new pharmaceutical drugs” from the company’s loading dock.
|
|
|
|
|
|
|
|
|
|
 |
|
|
|
|
|
|
1) |
The drugs involved were medicines that have been manufactured and sold for decades with the full knowledge of the FDA and in compliance with their enforcement policies.
The medicines have been widely prescribed by physicians and used by consumers as safe and effective treatments for colds and other conditions. For forty years, the FDA allowed these types of products to be sold without formal FDA approval. Recently, FDA changed that policy when another manufacturer obtained an approval of medicines similar to those manufactured by KV Pharmaceutical. KV chose not to apply for this approval. In March 2008, FDA directed KV to stop selling all forms of these medicines – a directive with which KV promptly and fully complied. These medicines, the $5.5 million value of which KV already has disclosed and written off, have been held at KV since last spring awaiting the FDA’s guidance on how to dispose of them. |
|
|
|
|
2) |
There was no “raid.” Federal authorities came to KV, as expected, to take possession of these medications. KV fully cooperated with the authorities, who tagged and inventoried the medications and then left them at KV for pickup in several weeks.
|
|
|
|
|
3) |
The medications were not “ready to go” to consumers. News accounts gave the impression that federal agents stepped in as KV was preparing to ship these medications to consumers. In fact, the medicines were not on a “loading dock,” but were being held by KV in segregated portions of its warehouses, where they have been held for federal authorities since last spring.
|
|
|
|
|
4) |
This is strictly an administrative matter concerning FDA rule changes. KV Pharmaceutical has willingly complied with all FDA guidance about its requirements and compliance policies.
|
|
|
|
|
5) |
These products do not pose a danger to consumers. Neither the FDA nor the U.S. Attorney has suggested anything to the contrary. In fact, a U.S. Attorney’s comments were noted that “a recall of products already in stores was unlikely” and that “officials were not aware of any immediate health risks” associated with these products, which have been sold and used for decades.
|
|
|
|
|
|
|
|
|
|
|
For many decades the U.S. Food and Drug Administration (FDA) has allowed certain prescription drugs to be marketed by pharmaceutical companies under longstanding FDA Compliance Guidelines, even though they are officially “unapproved.”
Prescription cough/cold products comprise a major block of these types of drugs. Several years ago, the FDA announced that “single ingredient” unapproved
time-release cough/cold products containing the ingredient
Guaifenesin should no longer be marketed.
KV complied and stopped marketing the affected products at the time specified by the FDA.
|
|
|
|
|
|
In 2007, the FDA published another Notice that addressed the continued marketing of “combination” products containing “time-released Guaifenesin”. In response to the 2007 notice, KV stopped
marketing all its combination products that contained time-released Guaifenesin.
KV only continued to market products which contained “immediate release Guaifenesin” in combination with other time-released drugs.
This action was based on KV’s interpretation of an FDA Guidance posted on the FDA web site which stated: “The action does not affect products containing Guaifenesin in immediate release form.” (Questions and Answers about FDA’s Enforcement Action Against Unapproved Timed-Release Guaifenesin Products, May 5, 2007)
|
|
|
|
|
|
KV was therefore surprised in March 2008, when representatives of the Missouri Department of Health and Senior Services decided to embargo these remaining cough/cold products which contained immediate release Guaifenesin, as well as a handful of other unapproved drugs that have been marketed by KV for many, many years with full knowledge of the FDA. In subsequent meetings with the FDA, they acknowledged that there was ambiguity in the language of their prior guidance on their website. After the embargo, when KV informed them of this ambiguity, they modified their website guidance on May 22, 2008, (two months AFTER they embargoed our products) to delete the sentence quoted above and to add the following: “The
notice applies to any drug product in timed-release form containing Guaifenesin, including combination drug products in which the Guaifenesin is in immediate release form but another ingredient in the combination drug product is in timed-release form.” (Questions and Answers about FDA’s Enforcement Action Against Unapproved Timed-Release Products Containing Guaifenesin, May 22, 2008 revision)
|
|
|
|
|
|
Had this unambiguous language been used since May 5, 2007, KV would have, just as it had on previous occasions over the years, ceased manufacturing and distributing this additional category of Guaifenesin products by the deadlines established in the May 5, 2007 Notice.
|
|
|
|
|
|
|
|
|
|
|
These medicines have been manufactured and sold for decades with the full knowledge of the FDA and in compliance with their enforcement policies. The medicines have been widely prescribed by physicians and used by consumers as safe and effective treatments for colds and other conditions. For forty years, the FDA allowed these types of products to be sold without formal approval. Recently, FDA changed that policy when another manufacturer obtained an approval of medicines similar to those manufactured by KV. Since cough/cold products do not comprise a significant part of KV’s business, KV chose not to seek FDA approval. In March 2008, FDA directed KV to stop selling all forms of these medicines – a directive with which KV promptly and fully complied. These medicines, the $5.5 million value of which KV already had disclosed and written off, have been held at KV since last spring awaiting the FDA’s guidance on how to dispose of them. This write-off occurred in March 2008 and was disclosed in KV’s financial statements and filings.
|
|
|
|
|
|
|
|
|
|
|
Since March 2008, KV has been waiting for the FDA to provide guidance as to how these embargoed products should be destroyed. Recently, FDA informed KV of their plan to come on site with the Missouri Department of Health and Senior Services as well as U.S. Marshals in order for the state agency to release their embargo and, at the same time, through a procedure known as a “seizure,” FDA would take control of the remaining embargoed items. This process was professionally and methodically completed on July 29th and 30th. The FDA has advised KV that they will be back in two or three weeks to transport the embargoed products to Indiana for destruction.
|
|
|
|
|
|
|
|
|
|
|
All of the discussions with the FDA during this entire period of time have been professional and constructive and the FDA has complimented KV leadership on numerous occasions, describing KV as being a “model of cooperation” in this matter. Further, KV respects the role of the FDA and works diligently to be compliant with their guidelines at all times.
|
|
|
|
|
|
|
|
|
|
|
There are four major areas of inaccuracy or lack of context in the news stories on this issue that appeared on or about July 30th.
|
|
|
|
|
|
|
1) |
News stories suggested a value of $24 million for the embargoed medicines. We don’t know the basis for this estimate. The total value of the write-off of this inventory was $5.5 million and it has already been properly accounted for, disclosed and written off in our financial statements in March 2008. |
|
|
|
|
2) |
News stories suggested that KV continued manufacturing the embargoed medicines after being told by the FDA to cease. This is inaccurate. At
no time did KV manufacture any of these products since the embargo in March of 2008 and, before that date, KV did not understand that FDA intended that it stop.
KV stopped making and marketing all of its products containing time-released Guaifenesin before the deadline established by the government in 2007. The FDA website guidance upon which KV relied in continuing to make products containing immediate release Guaifenesin was acknowledged as being ambiguous by the FDA, and they clarified their instruction on May 22, 2008 by changing their guidance to include the additional category of products. KV would never
make products that the FDA had instructed them to stop making.
|
|
|
|
|
3) |
News stories referred to this process as a “raid,” a gross mischaracterization. In fact, the visit by authorities to KV’s warehouse was simply the conclusion of a process that began last March. KV expected and welcomed the visit by authorities, and cooperated with them fully in their work. The authorities tagged and inventoried the medications, which KV had held for them in segregated parts of our warehouses since last spring. They then left the medications at KV, with plans to return in several weeks to pick up the embargoed medications and take them away for disposal.
|
|
|
|
|
4) |
News stories indicated that a U.S. attorney 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 okay.” This clearly implied that KV was attempting to market the products and would have done so had federal authorities not “raided” the warehouse on July 29th. This is an inaccurate representation. Since the embargo began in March of 2008, KV has been awaiting instructions on the disposition of the affected products and has never contemplated or staged the products for commercial shipment. Additionally, the embargoed medicines were not on a loading dock, but rather stored in segregated areas inside the warehouses where they have been since March and where they will be until the authorities return to pick them up.
|
|
|
|
|
|
|
 |
|
|
|
|
|
KV is not the only company that has marketed unapproved drugs. For decades, there were numerous manufacturers and marketers across the United States of cough/cold products containing Guaifenesin with full knowledge of the FDA. We have been told by the FDA that there are now no time-released products containing Guaifenesin being marketed. With respect to the other categories of unapproved products that KV has discontinued, however, it is worthy to note that other pharmaceutical companies are still today manufacturing unapproved drugs in these categories. For example, although there is a product which was embargoed and we will no longer be marketing it, the brand to which our product was a less expensive alternative, is also an unapproved drug and yet is still marketed today.
|
|
|
|
|
|
|
|
|
|
|
KV Pharmaceutical proudly employs more than 1,600 employees. We have worked together as a team for more than 65 years to build an exceptional
specialty pharmaceutical company that develops, manufactures and markets quality pharmaceutical products to meet patient needs in therapeutic areas as diverse as cardiovascular to women’s health. We are dedicated to continue building our great company in St. Louis for the sake of our employees, community and shareholders. We are dedicated to meeting unmet patient needs through our patents and innovative technologies. We are dedicated to achieving extraordinary growth results even in the face of challenging global economic times, while always adhering to high ethical standards and principles that each of us, as members of the KV team, have committed to uphold every day.
|
|
|
|
|
|
|
|
|
|
|
Our employees believe strongly that the news reports of July 30, 2008 characterized KV in a manner that was inaccurate and out of context. Our employees are the best of the best, and they have asked that we share the facts.
|
|
|
|
|
|
Please feel free to direct any questions about KV to our Corporate Communications Department at 314/645-6600, ext. 2219 or email
cbiffignani@kvph.com.
|
|