J&J to Unveil Plan to Fix Tylenol Quality Problems
Johnson & Johnson is expected to outline for U.S. regulators on Thursday a strategy to fix quality-control problems that have led to repeated recalls of Tylenol and other consumer medicines since last year.
The action plan, which J&J promised in late May to provide the U.S. Food and Drug Administration (FDA), could shed greater light on the magnitude of problems that have tarnished the reputation of the diversified healthcare company.
"J&J needs to convince the FDA this is a top priority for the firm and that senior management are on top of it - and that they have the appropriate controls and organizational structure to resolve these issues and prevent them from happening in the future," said Mayank Gandhi, an analyst with Cowen and Co.
Gandhi said it behooves J&J to include sweeping changes in the action plan that will satisfy FDA concerns, although the agency and drugmaker may need to negotiate and fine-tune the terms in coming months.
"But in these situations companies have very little negotiating power - the FDA gets what it wants," said Gandhi.
He said the action plan will contain timetables that could clarify how soon J&J can reopen a Pennsylvania plant that was closed because of the quality lapses. Gandhi predicted, however, that J&J will keep most terms of the action plan confidential, although it might reveal broad terms to industry analysts when the company reports second-quarter earnings on July 20.
J&J spokeswoman Bonnie Jacobs declined Reuters requests to comment on the action plan.
The company's McNeil Consumer Healthcare unit has issued four major product recalls in the past year due to an array of problems at its plants, sparking a congressional investigation and intense FDA scrutiny. Two smaller recalls, on July 8 and June 15, involved a total of 3 million bottles of products --including Tylenol for children and adults, several forms of Benadryl allergy tablets and Motrin painkiller.
The actions were related to J&J's recall on Jan. 15 of 53 million bottles of widely used products due to musty or moldy odors. One of McNeil's three main factories, located in Ft. Washington, Pennsylvania, has been closed while the company addresses problems cited by the FDA. J&J has said it will take until at least the end of the year to fix the plant's problems, with the help of outside consultants.
FDA inspectors found thick dust, grime and contaminated ingredients at the factory, which produces 40 widely used children's pain and allergy medications that have been recalled.
