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King Pharmaceuticals: Companies
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King Pharmaceuticals has settled a False Claims Act case for $125 million. The case involves violation of Medicaid prescription drug "best price" regulations and the underpayment of rebates for the drugs Altace, Aplisol, Lorabid, and Fluogen. King Pharmaceutical was giving price breaks to pharmacy benefit management companies (PBMs) that it was not giving to the U.S. Government. Settlements in 13 drug manufacturing cases since 2001 total more than $3.25 billion, and the U.S. Department of Justice says more than 150 prescription drug cases are now under investigation.
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In 1995, looking to become involved in the cardiovascular therapeutic area, King targeted the Hoechst drug Altace; despite producing nearly $90 million in revenues and boasting a patent that ran until 2008, Altace was not being promoted by its parent. When Hoechst merged with Marion Merrill Dow in 1995, Jefferson Gregory attempted to pry away Altace but at this juncture his bid was turned down. The company was more successful... in acquiring other branded drugs. In 1997 King paid $54 million to Glaxo Wellcome, Inc. to pick up the Cortisporin and Viroptic product lines, and six other branded products. In February 1998, at a cost of $127.9 million, King added 15 branded pharmaceutical products from Warner-Lambert Company, as well as a sterile manufacturing facility in Rochester, Michigan, which included manufacturing contracts for third parties. To help fund its expansion, King went public in June 1998.
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BRISTOL, Tenn.--(BUSINESS WIRE)--King Pharmaceuticals, Inc. (NYSE:KG) reported that its petition for rehearing and rehearing en banc was denied today by the U.S. Court of Appeals for the Federal Circuit. The Company filed the petition following the Court
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As Altace developed into a cash cow, King continued to add product lines. In 1999 the company purchased the antibiotic Lorabid from Eli Lilly for $91.7 million. The following year King acquired St. Louis-based Jones Pharma Incorporated in a $2.4 billion stock swap, a deal that added 100 sales reps and helped to diversify King's product lines by adding thyroid medications Levoxyl and Cytomel/Triostat, anesthetic Brevital Sodium, and Thrombin-JMI, used to control blood loss during surgery. It was a deal not well received on Wall Street... with the stock of both companies punished after the merger was announced. While the addition of Jones added more stability to the business, King was growing so much faster than Jones that many investors were worried about King slowing down, clearly more interested in short-term performance than long-term growth--an example of why John Gregory resisted taking GIV public a decade earlier. Nevertheless, the deal was not scuttled by lower stock prices and shareholders gave their approval in September 2000.
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King Pharmaceuticals is a vertically integrated pharmaceutical company that develops, manufactures and markets prescription pharmaceutical products. The company primarily operates in the US and Puerto Rico. It is headquartered in Bristol, Tennessee and employs 2,800 people.
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A month later Parkedale notified the FDA that it had completed “all actions required by the agency” (King Pharmaceuticals 2000), and the company was allowed to resume manufacturing. FDA monitoring continued. For the next several weeks, Parkedale held “teleconferences” with the FDA and submitted “biweekly written status reports on the corrective actions” it was still taking. Then, on June 9, 2000, Parkedale officials met with officials from the FDA for more discussions. The company said the FDA was “pleased and encouraged by Parkedale’s efforts and progress to date” (qtd. in “Parkedale Pharmaceuticals Meets” 2000).
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