Monday, June 11, 2012

FDA 483s Can Form Basis of Class Action Lawsuit

In the long list of things that are inadvisable to regulatory professionals, making misleading statements to the authority in charge of regulating your business likely ranks near the top. Those found to have misled the U.S. Food and Drug Administration (FDA) have in the past been publicly warned, fined, imprisoned, shut down and barred from participating in federal programs.

Now KV Pharmaceuticals is facing the prospect of an additional action: a class-action shareholder lawsuit as the result of an FDA inspection report. This is an important event, and here's why . . .

Judge: Regulatory Inspection Report Can Form Basis of Class Action Lawsuit - RAPS - News - Article View:

"On Monday, 4 June a federal appeals court ruled a securities fraud class action lawsuit could proceed against pharmaceutical manufacturer KV Pharmaceuticals for purportedly causing $1.5 billion in shareholder losses after first misleading FDA about manufacturing problems at a facility and later shutting down the facility’s manufacturing operations."

'via Blog this'

What's important to note is that this decision is a marked reversal from existing precedence, which has found Form 483 reports to be immaterial to federal securities law.

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