J&J Plant in Merck Venture Cited by U.S. FDA

20.07.2010 -

Johnson & Johnson has been cited by U.S. regulators for problems at a plant that is part of a consumer medicines joint venture with Merck & Co, in a fresh blow to its manufacturing operations.

J&J confirmed on Monday that Johnson & Johnson/Merck Consumer Pharmaceuticals Co had received a "Form 483" report from the U.S. Food and Drug Administration (FDA) following the agency's recent inspection of a plant in Lancaster, Pa. A Form 483 report lists any problems found during an inspection.

The joint venture "takes the issues raised by the agency seriously and is fully committed to addressing their concerns as rapidly as possible," J&J spokeswoman Bonnie Jacobs said in a statement. She declined to comment further.

A Merck spokeswoman declined to make an additional comment. An FDA spokeswoman confirmed the agency had issued the inspection report but said the report was not available.

The inspection report for the Lancaster facility comes as J&J is trying to fix problems at another Pennsylvania consumer products plant, where the company has halted production after a recall of a raft of children's medicines.

Analysts are hoping for more details about the company's manufacturing issues when J&J reports second-quarter earnings on Tuesday.

"One of the questions we had going into this quarter for J&J was: 'Is this an endemic problem or is it a localized problem?'" said Jan Wald, an analyst with Noble Financial Capital Markets.

"The fact that there's now another plant that's involved seems to imply that it's more than just a local problem, with just one plant going out of kilter."

The J&J/Merck joint venture was formed to market nonprescription drugs derived primarily from Merck. Its products include the heartburn medicines Pepcid and Mylanta, and the Mylicon infant anti-gas drops.

The Lancaster facility is jointly owned by the companies but managed by J&J.

In November 2008, the joint venture recalled 12,000 bottles of Mylicon because they might have contained metal fragments.

J&J has issued four major recalls of its consumer medicines in the past year, tarnishing its reputation and sparking an investigation by U.S. lawmakers. One of the biggest recalls was on April 30, when J&J took 40 widely used children's medications off the market, including painkillers Tylenol and Motrin and allergy treatments Benadryl and Zyrtec.

The Fort Washington, Pa., plant where those medicines were produced was closed after FDA inspectors said they found thick dust, grime and contaminated ingredients. J&J said last week it would revamp the Fort Washington plant and eliminate 300 of the factory's employees.

J&J has said most of the products made at the Fort Washington plant are unlikely to be available before the end of the year. Average annual sales of those products amount to about $650 million - only about 1% of expected sales this year for the diversified healthcare company.