File this under ‘Holy smoke, Batman!’ Marc Hermelin, the former chairman of KV Pharmaceutical, is now banned from participating in federal health care programs, such as Medicare and Medicaid. The move comes several months after a KV subsidiary pleaded guilty to two felony counts of criminal fraud for failing to report to the FDA that it was making oversize tablets that could be harmful to patients.

The move was disclosed by the Office of Inspector General of the Department of Health and Human Services (see this) and is part of a new, anti-fraud campaign to prevent wasteful spending in Medicare and Medicaid. And since Hermelin remains a significant KV shareholder and director, the drugmaker might also be banned, The St. Louis Post Dispatch notes.

In a filing earlier this year with the Securities and Exchange Commission, KV disclosed that such a move could hurt its ability to re-enter the marketplace and raise capital. “For our company not to be subject to the discretionary authority of HHS to exclude it from participation, the affected director would have to resign and the affected shareholder would have to divest ownership of such shareholder’s interest,” KV stated (see page 61).

After KV’s wholly owned subsidiary, Ethex, pleaded guilty in March, KV’s manufacturing plants had been closed for almost two years while waiting for FDA approval to resume manufacturing. In September, the paper writes, the FDA approved a plan to resume the manufacture of potassium chloride, which is used to treat a variety of ailments (background here).