WBCB’s Eric DiCrescenzo contributed to this post.
Local pharmaceutical company KVK-Tech, Inc. and two executives are facing charges from the United States Food & Drug Administration (“FDA”). The charges stem from the alleged distribution of unapproved drugs and providing misleading information to the FDA.
KVK-Tech is based in Newtown Township and also has a facility on Cabot Boulevard in Falls Township. The drug manufacturer touts itself as “a leader in the development and manufacture of high-quality, FDA-approved medicines that address unmet patient needs.
Despite that description, KVK-Tech, “de facto” owner Murty Vepuri, and the company’s head of quality assurance Ashvin Panchal are said to have conspired to defraud the United States and its agencies by working around the FDA. According to the U.S. Attorney’s Office, the indictment ranges from October 2010 to March 2015.
During that time, KVK-Tech and Vepuri allegedly bypassed numerous requirements that had the potential to slow the company’s production, along with slowing the distribution and sales of the drug.
“FDA laws and regulations regarding drug composition, manufacturing, quality, and related controls are designed to protect Americans’ health and safety – so we can all be confident that our prescription medications will be safe and effective,” said Acting U.S. Attorney Jennifer Williams.
The charges and indictment are in regards to KVK-Tech’s involvement with Hydroxyzine, a prescription drug used to treat anxiety.
Verpuchi allegeldy purchased an ingredient for the drug from a laboratory in Mexico, Dr. Reddy’s Laboratory (“DRL Mexico”). DRL Mexico is not an FDA-approved source due to violations with their manufacturing practices.
KVK-Tech is charged with knowingly distributing more than 383,000 unapproved bottles of Hydroxyzine from 2011 to 2013.
“When companies attempt to game the system to avoid these regulations and increase their profits, the ramifications are potentially catastrophic,” said Williams. “As this Indictment makes clear, any individuals or companies that try to evade the law in this manner will be brought to justice.”
Vepuri and Panchal each face a maximum sentence of five years in prison, a $250,000 fine and forfeiture. For KVK-Tech, the company could be fined as much as $4 million and could face forfeiture as well.