A pharmaceutical company based in eastern Pennsylvania admitted Wednesday to selling adulterated drugs which federal prosecutors alleged imperiled the lives of active-duty servicemembers and military veterans, the U.S. Department of Justice (DOJ) said.
KVK Research pleaded guilty to “two misdemeanor counts of introducing adulterated drugs into interstate commerce,” and was fined $1.5 million, according to the DOJ’s statement. The company’s corporate affiliate, KVK Tech Inc., agreed to implement “a compliance program designed to prevent and detect violations of federal regulations regarding current good manufacturing processes” and submit itself to independent compliance monitoring for three years to avoid conviction, the statement revealed. KVK Tech reportedly would also pay $2 million.
Both companies admitted that KVK Tech sold no fewer than 62 batches of adulterated hydroxyzine, an anti-allergy drug, between January 2011 and October 2013, the DOJ said. KVK Tech reportedly sourced the active ingredient in the hydroxyzine tablets from a foreign facility and did not request authorization from the U.S. Food and Drug Administration (FDA).
KVK Tech, its de facto owner, and its head of quality assurance were charged on June 11, 2021, according to a statement from the U.S. Attorney’s Office for the Eastern District of Pennsylvania. KVK Tech said on the same day that the allegations were “without merit”. (RELATED: Court Upholds Ruling Banning Pharma Boss For Life)
Generic Pharmaceuticals Manufacturer Pleads Guilty, Agrees to $1.5 Million Criminal Penalty for Distributing Adulterated Drugs and $2 Million to Resolve Civil Liability under the False Claims Act
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The two companies also admitted that KVK Tech manufactured prescription drugs without complying with current good manufacturing practices regulations at certain manufacturing steps between Feb. 27, 2019, and April 16, 2019, according to the statement. The sales “resulted in alleged false claims submitted” to some federal agencies, including the TRICARE program, a health program for active-duty and retired veterans, and their families, and the Veterans Administration.
“The introduction of adulterated pharmaceuticals into the TRICARE system endangers the lives of American service members and threatens our military readiness,” said Acting Special Agent in Charge Brian J. Solecki of the Defense Criminal Investigative Service (DCIS) Northeast Field Office, according to the statement.
“When adulterated drugs are introduced into interstate commerce, that conduct has the potential to jeopardize patient safety,” said U.S. Attorney Jacqueline C. Romero for the Eastern District of Pennsylvania, the statement noted.
“The DCIS is committed to working with the Justice Department and our law enforcement partners to ensure that companies who engage in fraudulent activity, at the expense of the U.S. military, are investigated and prosecuted,” Solecki reportedly added.