E-drug: NYT: Drug Makers and F.D.A. Fighting Hard Over Quality
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[From NY Times. In the heated debate between multinationals and generic
manufacturers, the issue of quality is often stressed by the multinationals.
Every now and again however, one is confronted with proof of quality
deficiencies amongst multinationals - even in their US plants. Here is the
latest news. Copied as fair use. KM]
http://www.nytimes.com/2002/05/18/business/18DRUG.html?tntemail1
May 17, 2002
Drug Makers and F.D.A. Fighting Hard Over Quality
By MELODY PETERSEN and REED ABELSON
Major drug makers and federal regulators are increasingly squaring off over
problems at factories that could affect the quality of medicines being
produced.
Two companies, Schering-Plough and Abbott Laboratories, announced this week
that the Food and Drug Administration was continuing to scrutinize their
factories or products. Schering said the F.D.A. was conducting a criminal
investigation in Puerto Rico, where it operates two factories. Abbott said
one of its plants had failed an F.D.A. inspection despite a three-year
effort to make improvements that the agency had demanded.
Wyeth, Eli Lilly and several other large drug makers have also recently been
criticized by federal regulators, who have found numerous problems with how
they make prescription drugs and other medical products.
Because of the manufacturing problems, some badly needed products are in
short supply. For example, hospitals have complained they cannot get enough
of Celestone, an injectable steroid from Schering often used to speed
development of the lungs of premature infants.
Some new drugs, including potential blockbusters like Cialis, a Lilly drug
similar to Viagra, have been delayed.
And more than 300 prescription drug products were recalled last year,
significantly more than the average number of recalls in the mid-1990's.
Only last month, Wyeth recalled certain forms of Heparin, an anticoagulant.
The reasons for the growing number of manufacturing problems are hotly
debated. The industry has tended to attribute the rise to what executives
describe as overly aggressive regulators, while the F.D.A. has said that
drug companies have failed to keep their factories up to date. At a meeting
earlier this month, Dr. Steven Galson, deputy director of the F.D.A.'s
Center for Drug Evaluation and Research, said the agency and drug
manufacturers were at a stalemate. He said that the industry had been
reluctant to make innovations in its factories and that regulators had been
forced to use their authority to press the companies to make the
improvements they say are needed.
"I think there is the sense by the F.D.A. that big pharmaceutical and
biotechnology companies have not paid enough attention to manufacturing,"
said Paul Heldman, a health care analyst for the Schwab Washington Research
Group, which held the meeting this month in Washington with F.D.A.
officials. "They are sending a very clear message that this should be a
focus."
In the last few years, the F.D.A. has begun levying huge fines against
companies that have repeatedly failed to fix problems that government
inspectors have found. Schering-Plough, for example, said late last year
that it might have to pay up to $500 million to the government to settle the
agency's concerns. Abbott paid $100 million in late 1999, and Wyeth paid $30
million in 2000.
The agency has also begun holding up approval of new drugs until the
companies can convince it that they have fixed manufacturing problems � an
action that gets investor attention quickly and can send the price of a
company's stock down.
"Those actions have had a significant impact, and companies are paying
attention," an agency official said yesterday.
The agency says it has become more aggressive with repeat violators and is
focusing on products that pose the highest risk to human health, in part to
compensate for the declining number of factories it is able to inspect each
year because of limited resources. Drug officials performed 1,497
inspections last year down from 2,072 in 1997.
Some industry analysts agree with the F.D.A. that many manufacturing
problems may also be a result of years in which drug companies did not spend
enough money to upgrade manufacturing techniques.
"I think there is an industry tendency to underinvest in manufacturing,"
said Ira S. Loss, an executive vice president at Washington Analysis. Such
investments are not as "sexy" as spending money on advertising or marketing,
he said.
Over the years, the number of employees working in pharmaceutical factories
has declined from a recent peak of 67,000 in 1993 to 58,800 in 2000,
according to the Pharmaceutical Research and Manufacturers of America. At
the same time, overall employment by the pharmaceutical companies increased
from 215,000 in 1993 to 224,000.
The trade association said no one was available yesterday to discuss the
industry's relationship with federal regulators and concerns about its
manufacturing techniques.
While advances in technology and other factors may have led to some decline
in manufacturing jobs, many companies are now adding people in response to
regulators' concerns.
Schering-Plough has said it will hire 500 people as it brings its factories
up to date. And Wyeth said it had added 1,400 people dedicated to quality
control in response to the consent decree it reached with the government in
2000.
In fact, Wyeth said it caught the problems with Heparin during routine
testing, which, it says, shows its quality control system works.
Eli Lilly said it had hired hundreds of new quality control employees as it
works to address the F.D.A.'s concerns. Lilly has five new drugs that will
not be approved until the F.D.A. says that widespread problems in several
factories in Indiana have been fixed.
"Not only have we heard the F.D.A.'s message," Edward A. West, a spokesman
for Lilly, said yesterday, "we understand that message. We need to keep
investing."
But some argue that the current regulatory environment discourages companies
from improving their manufacturing processes because any change requires
approval from regulators. Companies worry about possible delays if
inspectors are confronted with new technology, and they may be reluctant to
spend on obtaining approval on drugs that may soon lose their patent
protection.
What is more, the regulations may simply be outdated, said William Vodra,
who worked on them about 25 years ago as a lawyer for the F.D.A. "They have
not been fundamentally rethought," said Mr. Vodra, who now works for the law
firm of Arnold & Porter and represents several drug companies.
The regulations do not take into account changes in how companies view
quality control, he said.
The F.D.A. has also taken to task biotechnology companies that contract with
other companies to manufacture their drugs for not ensuring that those
companies are complying with federal regulations, said Mr. Heldman, the
Schwab analyst.
F.D.A officials say they are looking at how the agency's enforcement
policies can be changed to give pharmaceutical companies more incentive to
upgrade their factories.
But it is clear that the F.D.A. and many companies are still far apart.
Abbott, for example, has dedicated hundreds of employees and spent tens of
millions of dollars over the last three years trying to appease the
regulators, only to come up short.
The company said it was surprised and "deeply disappointed" by the F.D.A.'s
latest inspection.
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