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# 3rd Circuit Flunks FDA Again Over Illegal Generics
- URL: https://www.fdaweb.com/3rd-circuit-flunks-fda-again-over-illegal-generics/
- Published: 2023-07-25T12:00:00.000Z
- Updated: 2026-09-14T18:46:18.000Z
- Author: David McFarland
- Tags: Drugs, #legacy-id-D5154954

The 3rd Circuit Court of Appeals says a Pennsylvania federal court correctly rejected a Department of Justice request for a conspiracy charge against KVK-Tech, a Newtown, PA, generic drug manufacturer. The lower court had said the government’s indictment failed to state the offense and the government had [appealed](https://www.fdaweb.com/doj-wants-conspiracy-charge-against-kvk-tech/) to the 3rd Circuit.

The company is charged with distributing 383,000 bottles of hydroxyzine between 2011 and 2013 that contained an active ingredient purchased from a Dr. Reddy’s Laboratories facility in Mexico that was not FDA-approved.

In sending the case back to the Pennsylvania federal court for further proceedings on charges that were not dismissed, the appeals court [agreed](http://www2.ca3.uscourts.gov/opinarch/221562p.pdf?ref=fdaweb.com) with the lower court’s finding that the indictment charging the company and two executives with conspiracy to defraud and to commit offenses against the U.S. did not state the offense.

The relevant portion of the indictment alleged that the defendants violated provisions of the Federal Food, Drug, and Cosmetic Act that prohibit introducing a “new drug” into interstate commerce unless an FDA approval “is effective with respect to such drug.”

The court said that while the indictment often refers to the hydroxyzine at issue as an “unapproved new drug,” the relevant statutory provisions do not prohibit the introduction of “unapproved new drugs.” Rather, the court said, they prohibit the introduction of any “new drug,” unless an approval of an NDA or ANDA is effective for the drug.