FDA probing Mylan's actions
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The U.S. Food and Drug Administration said yesterday it was investigating a report that workers at Mylan Inc.'s generic drug plant in Morgantown, W.Va., violated government-mandated quality control procedures intended to ensure the safety and effectiveness of prescription drugs.
A story published by the Pittsburgh Post-Gazette Sunday cited a Mylan internal report that stated workers routinely overrode computer-generated warnings about potential problems with the medications they were producing. The report did not say which medications were involved.
Mylan's report said the problem was "pervasive" and occurred on all three shifts at the plant, which makes an estimated 19 billion doses annually. It did not say how long the unauthorized practice had been going on.
The breach in quality control was "very serious," involving "falsifying information" and "altering product" but did not affect the quality of any medications, the report stated. The report did not say how the company determined that quality was not compromised.
The FDA probe was announced as the price of Mylan stock fell nearly 13 percent yesterday amid heavy trading.
"FDA is currently conducting fact-finding and investigating the situation," spokesman Christopher Kelly said in an e-mail yesterday. He declined further comment.
In addition, the World Health Organization said last week it was considering action against Mylan's Matrix Laboratories plant in India after finding "major deviations" to good manufacturing practice standards during an inspection in May.
The problems included production records that were signed by workers even though they were not on site at the time, WHO stated in a July 22 letter to Matrix.
The letter said that although Matrix had taken, or planned to take, corrective action, "issues of concern" remained.
Mylan did not respond yesterday to requests for comment.
Last week, the company did not respond to requests for interviews about the breach in quality control in Morgantown or to a list of questions e-mailed to Mylan's corporate offices in Cecil.
Sunday night, Mylan issued a brief statement saying the Morgantown breach "had no impact on the quality of our product."
"Our customers and stakeholders can rest assured that whenever there is even the slightest departure from [standard operating procedures] it will be dealt with immediately and effectively," the company stated.
Former FDA inspectors and industry consultants who reviewed Mylan's internal report for the newspaper said the widespread breach of protocol raised troubling questions about the integrity and oversight of the plant's quality control operations.
Mylan's report did not state whether the company had notified the FDA about the matter. The agency has cited several generic drug manufacturers over the past year for the type of issues Mylan identified in its internal report.
Shares of Mylan fell nearly 13 percent yesterday as investors analyzed what impact the report may have on Mylan, the world's third-largest generic drug maker. The stock traded as low as $11.66 before finishing the day at $12.10, down $1.75. More than 50 million shares traded hands, more than six times the average daily volume over the last three months.
"[Wall] Street is primarily concerned whether Mylan contacted the FDA and discussed the issues cited -- and if they didn't contact the FDA -- why wasn't this an issue that would prompt such disclosure," Cowen and Co. analyst Ken Cacciatore wrote in a note to clients yesterday. He maintained his "neutral" rating on the stock.
Bank of America Merrill Lynch analyst Gregg Gilbert told clients he was maintaining his "buy" rating on Mylan shares "based on our assumption that product quality has not been and will not be an issue."
Analysts will have the opportunity to question CEO Robert Coury and other top executives about the matter during a conference call Thursday after Mylan releases its second-quarter results.
First Published July 28, 2009 12:00 am