FDA faults J&J for McNeil's poor quality system across multiple facilities

At a US congressional hearing reviewing GMP issues surrounding Johnson & Johnson's string of recalls within its McNeil consumer and OTC unit, J&J's CEO William Weldon said the firm had "let the public down" and needed to do better. In reviewing the company's next steps, he proclaimed, "I accept full accountability for the problems at McNeil, and I will take full accountability for fixing them".

But while such a mea culpa may sit well with investors, the firm could still face a lot more scrutiny under the watchful eye of FDA inspectors – as a top official made clear.

Dr Joshua Sharfstein, the FDA's principal deputy commissioner, speaking before the House Committee on Oversight and Government Reform, provided an update about how every facility associated with McNeil has undergone a GMP inspection within the past year – with a common finding of a "failure to investigate and correct product problems in a prompt and thorough manner".

The problems uncovered at the different sites have been of "varying degrees of seriousness", the official noted.

When one looks at the bigger picture, "the company had an inadequate quality system, one that could be seen across multiple facilities."

J&J has touted the fact that it has provided the FDA with a large-scale plan for fixing its manufacturing problems, and has put a company veteran into a position as a J&J-wide chief quality officer, with oversight on quality and compliance issues, including manufacturing operations for the company's pharmaceuticals, medical device and consumer segments (scripintelligence.com, 20 September 2010). Across McNeil, J&J is investing more than $100 million on facilities and other improvements. But the agency is still reviewing the plan, Dr Sharfstein said, noting that high-level discussions have taken place to address what the regulator considers to be "breakdowns" in leadership and oversight at J&J.

The FDA acknowledged that J&J had made changes. But Dr Sharfstein testified: "We intend to keep a close eye on these facilities until the company earns back our confidence."

J&J's McNeil unit is being investigated by both the oversight committee and the FDA. The McNeil facility in Fort Washington, Pennsylvania, has been closed since late April after FDA inspectors found serious GMP problems, which included the company failing to meet its own specifications for bacteria in raw material lots or for particulates, and for one Tylenol product the possibility of higher than expected concentrations of Tylenol per dropper. Massive recalls of children's over-the-counter medicines occurred and the Fort Washington facility is being retooled. Problems with a plant in Puerto Rico triggered other recalls. Company and FDA officials state that there have been no reported injuries from the recalled medicines.

Mr Weldon told the committee that that the firm will begin selling some children's liquid medicine from the second week of October – earlier than executives had predicted.

FDA shares blame: "phantom" recall

At the initial hearing, a so-called "phantom" or "stealth" recall was at the centre of the committee's investigation (scripintelligence.com, 2 June 2010). At the latest hearing, Representative Edolphus Towns, who heads the oversight committee, grilled both J&J employees and the FDA on the 2009 incident – where the company hired a third-party contractor to remove quantities of Motrin IB200 (ibuprofen) from store shelves since the tablets were not dissolving quickly enough, while making no mention of a recall to retailers and not alerting the public. The Motrin incident came to light when lawmakers began probing J&J's recall of 40 children's OTC liquid drugs made by its McNeil unit.

The committee released more documents from J&J and the FDA surrounding the "stealth" recall, and it has now come to light that the FDA did know what J&J was doing, but only to a degree.

Some of the documents show that the tablets were distributed to gasoline service stations and McNeil hired contractors to collect the remaining tablets from stores. Mr Weldon told the committee that the firm believes that it did keep the FDA informed about its plans for what it termed a product retrieval.

Still, Mr Weldon appeared to suggest the company made a mistake when it decided to buy-up the product through the use of third-party contractors rather than issue a formal recall on Motrin. "This episode is not a model for how I would like to see J&J companies approach problems with defective product when they arise, and I can assure the committee that we are taking stock of the lessons learned," he said.

Lawmakers stated that McNeil should have been more straightforward. Colleen Goggins, J&J's senior executive in charge of the consumer group, testified at the May hearing that she had no knowledge of instructions to contractors involved in the phantom recall to not tell store employees what they were doing. At the latest hearing, she reiterated this view, while at the same time acknowledging that there were J&J/McNeil documents that instructed the contractors how to behave while conducting the retrieval of the product.

She stated: "Since the [May] hearing, the company located and provided to the committee a copy of instructions issued by McNeil to its contractor on the Motrin matter. At the time of the hearing in May, I had no personal knowledge of and had not seen the contractor or McNeil instructions. Since then, however, I have reviewed the McNeil instructions to the contractor that instructed the contractor to purchase the product without engaging in discussions with the store personnel. Based on what I learned since May, I believe that McNeil should have handled things different. We, as a company have learned from this process." Ms Goggins will retire in March, J&J announced last month.

Dr Sharfstein also told the committee that the FDA should have done more, while at the same time emphasising that some of the communications from McNeil to the FDA "did not fully disclose the scale of the action or the way the company was intending to proceed."

"I do think the FDA should have been asking questions right away – and figured out what the agency eventually figured out, that this really did need to be registered as a real recall," he told the committee. He claimed there was no evidence that the agency knew about the "surreptitious, lying part of the recall". It was clear in November 2008 that the Motrin lots did not meet specifications. "Yet the actual [formal] recall did not happen until early August of the following year," he claimed. "This took too long."

Dr Sharfstein told the committee that the person overseeing the San Juan district office who had been involved in the discussions on the buying back of the Motrin product could not testify at the hearing because of a criminal investigation into related events. In response to a query from one the committee members as to whether the individual, described as Maridalia Torres, had done anything inappropriate, Dr Sharfstein replied, "I would say this is a matter under investigation".

Dr Sharfstein claimed that the events of the so-called "phantom recall" point to the limits of FDA's authority, which do not allow the agency to order recalls. Recalls are initiated by manufacturers, who alert the FDA to their plans. FDA urges and expects firms to notify the agency when initiating a drug recall, but firms have no legal requirement to provide this type of notification. If a firm does initiate a drug recall, the agency does not have legal authority to approve the manner in which the firm conducts the recall or to direct the firm to adopt a different strategy.

"In this case, if FDA had the authority simply to order a recall to be done in the right way, I do not believe these events would have occurred," Dr Sharfstein told the lawmakers.

Committee Chairman Towns has introduced a bill that would give the FDA the power to order recalls.

some employees fired

Both Mr Weldon and Ms Goggins testified that some employees were fired. In his written testimony, Mr Weldon stated, "Already by May, McNeil had appointed a new vice-president of quality assurance, appointed a new vice-president of operations, appointed a new plant manager at Fort Washington, and appointed a new head of quality for the Fort Washington plant." During the hearing, Representative Darrell Issa, the Ranking Republican on the oversight committee, said that if the company wanted to install confidence then the people in charge when the problems arose ought to have been dismissed. But when Mr Weldon was queried about McNeil president Peter Luther, Mr Weldon stated, in part, that "Mr Luther has been a long-standing J&J employee", is "committed to improving and revamping the facility", [and] Yes, I think Peter Luther is a good employee who can contribute to rectifying this problem". Later, Mr Weldon claimed that the individuals who need to be replaced have been replaced.

For months, portfolio managers have shrugged off J&J's plant problems, since the financial hit has been modest next to overall yearly sales. It has been no surprise that analysts believe that Mr Weldon is secure in his job. Morningstar analyst Damien Conover has been quoted as saying that "this may create a bigger black eye for J&J, but I'd be pretty surprised if it will push Weldon out of his position".