CVS sues KV over generic drug supply cutoff

CVS Pharmacy Inc., the operator of more than 7,000 drugstores in the U.S., sued KV Pharmaceutical Co., claiming the drugmaker broke a supply contract after the U.S. Food and Drug Administration cited its generic unit for manufacturing problems.

Locally, CVS has operations in Northbrook.

CVS Pharmacy, a unit of CVS Caremark Corp., claims that KV owes it at least $100 million for failing to supply metoprolol extended release tablets, potassium chloride capsules and nitroglycerine tablets beginning last year, according to a complaint filed Feb. 26 in federal court in Rhode Island.

CVS, based in Woonsocket, Rhode Island, filed the lawsuit a day after St. Louis-based KV announced that its Ethex Corp. generic pharmaceutical marketing and distribution unit agreed to plead guilty to criminal charges, pay a $25.8 million fine and forfeit $1.8 million to resolve a U.S. Justice Department investigation. Ethex, which will cease operations, is also a defendant in the CVS suit.

"Eventually CVS Pharmacy was able to locate other suppliers for the generic products, but at substantially increased prices, resulting in CVS Pharmacy paying tens of millions of dollars above what it would have paid defendants for the same products," CVS said in the complaint.

Michael Anderson, a KV spokesman, didn't return a phone message seeking comment on the suit.