Johnson & Johnson Gets A Consent Decree
14 CommentsBy Ed Silverman // March 10th, 2011 // 4:06 pm
After months of serious manufacturing problems, Johnson & Johnson has entered into a consent decree with the FDA for three separate facilities that have been responsible for most product recalls over the past year. Moreover, two execs - McNeil Consumer Healthcare vp of quality Veronica Cruz and the vp of operations for OTC products, Hakan Erdemir - were also named as civil defendants.
The plants, all of which are run by the McNeil Consumer Healthcare unit, are located in Fort Washington and Lancaster, Pennsylvania, and Las Piedras, Puerto Rico. As part of the decree, which is expected to run five years, J&J is required to destroy all drugs made at and recalled (EDITOR’S NOTE: to clarify, we later added ‘AND RECALLED’) from the facilities since 2009, J&J must hire outside experts to develop remediation plans and follow strict timetables for meeting various benchmarks (here is the consent decree).
“This is a strong, but necessary, step to ensure that the products manufactured by this company meet federal standards for quality, safety and purity,” Deborah Autor, director of the Office of Compliance in the FDA’s Center for Drug Evaluation and Research, says in a statement. We should note that, technically, the decree is with McNeil, which is owned by J&J.
There is no upfront fine, because this is a civil - not criminal - action. But if J&J violates the decree, the FDA may order its McNeil unit to stop manufacturing, recall products and take other unspecified actions, including levying fines of $15,000 for each day and an additional $15,000 for each violation of the law, up to $10 million annually. And if you were wondering what some FDA personnel cost, J&J must reimburse the agency $87.57 for each hour of investigative or inspection work, and $104.96 for each hour of lab and analytical work. Then there’s 51 cents for each mile driven.
“The right we have (to issue a penalty) is under criminal law,” Doug Stearns, an assistant director in the office of compliance at the FDA’s Center for Drug Evaluation and Research, tells us. “The point of this action is remedial. the point of the action is not to punish. Punishment is outside the scope of this civil action.” When asked about possible criminal charges, he says this: “I’m not at liberty to discuss any potential criminal case. I can’t comment on that.”
The two execs, by the way, are not being singled out for punishment, “The naming of individuals in a decree is not punishment or saying they’ve done anything wrong,” he adds. “It’s been part of what the agency does in terms of assuring a company meets its standards of the decree…They’re obligated by virtue of their position to make sure those things happen.” By the way, for those who are interested in transparency issues, the J&J press release does not mention that two of its execs are named as defendants.
The FDA move comes after an extraordinary period in which Johnson & Johnson recalled tens of millions of over-the-counter products made at these plants, including such well-known brand names as Tylenol, Motrin, Zyrtec, and Benadryl, due to serious manufacturing problems. However, the health care giant compounded its difficulties by attempting to cover up some recalls by hiring outside contractors to purchase products from store shelves (read about the mystery shoppers here).
The disclosure came as part of a congressional investigation, which was followed by federal and state probes; the loss last year of $900 million in OTC product sales; the elimination of 300 jobs; reduced employee bonuses; a loss of consumer trust and at least one state filed a lawsuit. Meanwhile, the Fort Washington plan was closed and will remain shuttered until remediation is complete.
AnnePME
Looks like a busy day on the Pharmalot campus. Hope that Ed had plenty of coffee today.
AnnePME
Ed,
To clarify, under most circumstances, the FDA does not have recall authority, but the FDA can force a company to recall if they are violating an FDA consent decree?
Ed Silverman
Hi Anne,
Good question and since I’m not an FDA compliance person, I would refer you to the consent decree.
In such circumstances, however, the FDA has some leverage to negotiate certain actions and can presumably justify forcing the company to toss product as a public health measure.
If there is more to this, folks, please write us.
Hope this helps,
ed
AnnePME
Hi Ed
Thanks for the response. It helps.
John English
Anne,
If you would like a summary on the the FDAs statutory authority to recall, I would suggest this position paper by an arm of the Libary of congress:
http://www.nationalaglawcenter.org/assets/crs/RL34167.pdf
Things do change under a consent decree because instead of being a responsible member of this (in theory) “self-regulated” industry,” the company under decree is only operating under the consent of the court. Their compliance is no longer assumed - it has to be proved. There records are not assumed to be correct unless the ‘cGMP expert’ says so. If the FDA has a question, they ask the Qualified Individual the question and then read the CI’s answer.
The rules are very different. That’s been my experience. Hopefully this will help.
Anne PME
Hi Ed
Thanks. It does help but the consent agreement will have to wait until I am back on a bigger screen.
Can you access the decree from the SEC website?
batman
This seems like its way overdue. Dear God this company is a disgrace. An utter disaster and anyone workingfor them should hang their heads.
AnnePME
Thanks very much John.
So, if I understand it correctly, a consent agreement puts more burden on the company- in this case J & J - to prove that the medicines are safe? Does this also change their contracts with the companies who sell their products? I would think that they also now have significant leverage w/J & J.
What about implied warrantees? How do these work and would they change now that J & J has signed a consent decree?
Randy Perez
If you read the consent decree carefully you will see that J&J is not required to destroy all lots made at those facilities since 2009, but rather all lots from those facilities made since 2009 that had been recalled. Those lots were probably scheduled for destruction anyway, but FDA would likely have required they be retained for the duration of their inspections in case they wanted to do additional analysis.
I’m not sure how different the rules are under consent, but normally the FDA cannot force a recall. However, they do have the power to sieze adulterated lots. As you would expect siezures get lots of negative publicity, so when FDA suggests a recall they usually get what they ask for.
pharma gal
Just wondering what took so long? One has to wonder whether the heretofore image of J&J gave them more leeway with the FDA. Having worked for a small company in the past who ended up under consent degree after comparatively smaller and fewer violations, and anyone shed some light on the “range” of responses of the FDA depending on the reputation of the company and its status in the idustry.
industry insider
Next stop is the Graybar Hotel.
M. Black
The FDA could put a two mile long piece of yellow tape that says CRIME SCENE around a facility and walk people out if they want to.
MB
M. Black
At a minimum, the FDA could themselves recall anything they damn please. Well, let’s be more specific. First, a consent decree is in place. Then, they could recall any product deemed adulterated (the definition of “adulterated” in these circumstances is so broad, that, yeah, that could mean pretty much anything,) AND they can recall product per the opinion of a “cGMP expert” deeming insufficient compliance.
Basically, if the FDA wants to wipe the shelves dry, they have various legal tools to do so. For them to feel the need to do so, the situation must be so bad that it should deter the public from ever relying on products from the company, and possibly even their contract manufacturers (who remain hidden in a proverbial bunker throughout this process, but may be just as much to blame, as well as outsourced contract testing labs, who also remain unscathed in a proverbial bunker.
Our government does a S$&@ job with a capital “S” in monitoring and enforcing compliance on contract manufacturing firms. I have my own opinions of why this may be so, but at the end of the day, all of these reasons are bullshit.
Wake up feds. I’m paying you $4 a year for services not rendered.
MB
MB
M. Black
Pharmagal,
The FDA may very well have known about these problems for some time, but turned their cheeks until the company’s revenue grew to the point that the FDA could justify the largest fine, without letting it go so far as to cause mass social unrest.
Unethical? Hell yeah. But this is the FDA after all.
MB