Ex-KV Pharmaceutical CEO Hermelin Pleads Guilty to Drug Label Law Breach

Marc Hermelin, the former KV Pharmaceutical Co. chief executive officer banned last year from doing business with the U.S., pleaded guilty to violating drug- labeling laws and was sentenced to 30 days in prison.

U.S. District Judge E. Richard Webber in St. Louis also ordered Hermelin today to pay a $1 million fine and forfeit $900,000. Hermelin, who the Bridgeton, Missouri-based company said was fired as CEO and chairman in 2008 and who resigned as a director in November, reached a plea agreement today with prosecutors, who also announced the charges today.

“Greed, abuse of power and recklessness, that’s what I see,” Webber said after Hermelin pleaded guilty.

“I accept full responsibility for what’s happened,” Hermelin told Webber before being sentenced.

“You just saved yourself 30 days in jail,” Webber replied. “I was going to sentence you to 60 days for showing no remorse.”

Hermelin, 69, faced two counts of violating the U.S. Food, Drug and Cosmetic Act, in connection with the company’s shipping interstate of oversized tablets of the painkiller morphine sulfate in 2008.

While the pills were labeled as 30-miligram and 60-miligram strength, they were “actually oversized,” and contained more of the active ingredient than those labels indicated, according to a charging document prosecutors filed with the court.

Hermelin’s lawyer, Jim Martin, declined to comment after the hearing.

Ethex Plea

Ethex Corp., a KV subsidiary, last year pleaded guilty to two felony counts stemming from its failure to tell the U.S. Food and Drug Administration about manufacturing problems involving oversized prescription drug tablets, and agreed to pay fines and restitution totaling $25.8 million.

The drugs were recalled after Ethex received reports of problems, said CEO Michael Anderson in a Feb. 25, 2010, phone interview. The recalled drugs were dextroamphetamine, which is used to treat attention-deficit and hyperactivity disorders, and Propafenone, which combats heart arrhythmias,

KV agreed to dissolve its Ethex unit as part of an agreement with the U.S. Department of Health and Human Services, according to the Nov. 17 statement in which it announced the federal agency had told Hermelin he’d be “excluded” from conducting health-care-related business with the U.S.

The agency’s website confirms the ban, made effective on Nov. 18, without specifying its duration.

The case is U.S. v. Hermelin, 4:11-cr-00001, U.S. District Court, Eastern District of Missouri (St. Louis).

To contact the reporters on this story: Joe Whittington in St. Louis at joethewhitt@sbcglobal.net; Andrew Harris in Chicago at aharris16@bloomberg.net

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net

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