Consent Decrees—Just the Cost of Doing Business?

The strategic reasons behind the acquisition in the works for Sanofi to purchase Genzyme are clear. It was a matter of fixing a sale price that reflected the true current and future value of Genzyme.

For those of us in the quality assurance and regulatory compliance professions, there has been the curiosity of how the history of manufacturing and compliance woes at Genzyme would factor into the sale price. I guess we’ll never know. But it is interesting that a financial analyst would minimize this kind of problem leading to a consent decree as “the cost of doing business.”

Jim Prutow, a partner in the health care practice at the PRTM consulting firm, says of the Sanofi-Genzyme deal: “… regulatory actions including consent decrees are increasingly part of the cost of business, and it is not the ‘death knell’ to a company’s growth and acquisition options that it was in the past.” ¹

This points to the frustration at FDA on finding the right lever to pry some companies into compliance with the laws and regulations directed toward drug safety and efficacy and patient protection. Fines alone are ineffective, because they are just considered to be the “cost of doing business.” (And to whom are these costs passed on?)

Eric Blumberg, the FDA’s deputy chief counsel for litigation, prophetically said in May 2002 when he sign the Schering-Plough consent decree, “It's clear we're not getting the job done with large, monetary settlements. Unless the government shows more resolve to criminally charge individuals at all levels in the company, we cannot expect to make progress.” ² (See The QA Pharm 11/6/10.)

What might we expect for the future of Genzyme’s compliance profile as a result of the acquisition by Sanofi?

Christopher Viehbacher, Sanofi-Aventis CEO, says Sanofi can help Genzyme deal with its FDA consent decree and create "a culture of quality." ³

But Richard L. Friedman, Director of the FDA Division of Manufacturing and Product Quality and Diana Amador-Toro, Director of FDA New Jersey District have recently weighed in on the subject of quality at Sanofi:

·       A Warning Letter was issued on January 28, 2011, at the Sanofi location in New Jersey ⁴ cited serious violations of failing to report serious and unexpected adverse advents in a timely manner. Examples given were as much as 896 days late.

·       A Warning Letter was issued on February 9, 2011, at the Sanofi location in Germany ⁵ cited serious violations relating to sterility assurance and contamination control. Examples given included the repeat observation (from 2008) of failing to identify microorganisms recovered from sterility tests.

We can only hope for the sake of Genzyme’s patients who have rare, devastating lysosomal diseases that the connection is soon made between regulatory compliance and continuous supply of quality products at the most economical cost—with or without the help of Sanofi’s “culture of quality.”

The QA Pharm

¹ Silverman, Ed, Sanofi Gobbles up Genzyme: What the Wags Say, Pharmalot 2/16/11.

² Miller, George, Schering-Plough Pharma Consent Decrees, FiercePharma, 10/19/10.

³ Staton, Tracy, Sanofi caps Genzyme persuit with $20 Billion Deal, FiercePharma, 2/17/11.

⁴ Warning Letter 11-NWJ-06, 1/28/11, Sanofi-Aventis US.

⁵ Warning Letter 320-11-09, 2/09/11, Sanofi-Aventis Deutchland.

“Out of Abundance of Caution”—and Triad Group’s “One Concerned Customer”

“Out of abundance of caution” the Triad Group initiated a recall of all lots of Alcohol Prep Pads, Alcohol Swabs and Alcohol Swabsticks on January 3, 2011, due to “concerns from a customer about potential contamination of products with an objectionable organism, namely Bacillus cereus.”

Triad’s Press Release on January 5, 2011, continued to state that it had received “one report of a non-life-threatening skin infection.” The date of this one report was not given. (I suspect we won’t know that date until a Warning Letter comes out.)

Triad published a fact sheet about the recall on its website. They stated, “There has been ONE report of a potential contaminant out of hundreds of millions of products sold.” (Their emphasis, not mine.)

The contaminated product was recalled, but tragically, not before the product was used with the surgery of a 2-year-old Houston boy who allegedly died from acute meningitis due to Bacillus cereus on December 1, 2010. Use of the product has been confirmed. The parents have filed a wrongful death suit. “We’ve been devastated. We’ve been absolutely crushed.”^a

Without going into a bacteriology lecture, suffice it to say, all the experts have weighed in on what every rank-in-file microbiologist in the medical products laboratory should know: Bacillus cereus is a very bad bug. This spore former is resistant to heat and tough to kill. That’s why it’s called an “objectionable organism”—it doesn’t belong in the product at any level.

“Concerns from a customer.”—one, just one customer—out of hundred of millions sold—one, just one customer. In the case of Bacillus cereus, it shouldn’t have to take more than one to crawl all over the problem.

My message to the Quality Department and those responsible for responsible for designing or operating the Complaint Handling System required by 21CFR211.198 and 21CRF820.198—sometimes it only takes one. Some complaints are so serious and potentially life threatening, that it just takes one. Don’t look for a trend.

With Triad’s one concerned customer, it’s not whether it was non-life-threatening to that one customer. Rather, it is all about Bacillus cereus.

I would have expected the “abundance of caution” at the Triad Group to be: (1) stop production, (2) recall all product, and (3) initiate a revalidation of all production lines—upon the first report of Bacillus cereus.

We don’t know yet the date of when Triad became aware of the first report. But I don’t get the feeling that the “abundance of caution” was very abundant.

UPDATED, February 25, 2011

On February 22, 2011, the FDA posted the FD483 related to this blog for the Triad Group’s parent organization, H&P Industries. Please go to this link:

http://www.fda.gov/AboutFDA/CentersOffices/ORA/ORAElectronicReadingRoom/default.htm

This is just beyond words.

It describes a fatal combination of inadequately developed processes; unvalidated sterilization processes; uncontrolled manufacturing environments; unqualified employees; failing sterility tests; and an irresponsible Quality Unit knowing releasing contaminated product into the market.

The 46 observations covering 30-page tell a story of nothing less than a foreseeable disaster. A ticking time bomb that is claimed to have caused the death of a two-year old Harrison Kothari of Houston and potential infections of more than 100 others according to the lawyers representing the Kotharis. ²

This surely will be a test case to see just how bad it has to be before the FDA takes action against individuals. (See The QA Pharm 9/11/10.)


UPDATED April 7, 2011


FDA Seizes $6 million in Products from Triad
http://www.jsonline.com/business/119352799.html

The QA Pharm

¹ Aleccia, JoNel, Parents blame toddler’s death on tainted alcohol wipes, msnbc.com, 2/15/11.

² Aleccia, JoNel, FDA defends actions at plant that made tainted wipes, msnbc.com, 2/25/11.

The Zero-Defect Aspiration at Colorific Baxter

If the aspiration of Baxter CEO Robert Parkinson is “zero defects,” then the recent Warning Letter at their plant in Puerto Rico suggests that they have to get back to the basics.

The Warning Letter dated January 20, 2011, is very diagnostic of endemic issues where all the signs were there, but the symptoms were apparently ignored until it became another in the long line of regulatory enforcement events.

The symptoms were the “fabulous four” of pending failure: (1) not thoroughly investigating failures; (2) not listening to customer complaints about their failures; (3) not reporting these failures to the FDA; and (4) not resolving these failures, which were previously cited by FDA.

But to exacerbate the malady, Baxter chose to mask, rather than treat the underlying sickness.

The Warning Letter revealed an equipment failure that affected the color of the otherwise colorless liquid product. What was the Baxter approach to fixing this problem and work toward achieving zero defects?

·       Baxter concluded in their investigation that healthcare professionals would detect the discolored product and not use it.

·       Baxter developed and distributed a color chart to provide instructions to end-users when to use or not to use their product.

It was no surprise that the FDA editorialized, “It is unacceptable to rely upon the health care professional to fulfill your Quality Control Unit responsibilities…The end user should not be expected to make a determination of product safety and effectiveness…”

Mr. Parkinson said to analysts after the citation was issued, “Clearly, I’m not happy to have to communicate that we got a Warning Letter. Our aspiration is zero defects here. We are better than we were, be we have to get better.”

So—what’s the strategy, Mr. Parkinson? What system do you need to put in place that would have alerted you to the “fabulous four” in time to intervene? What was the role of QA in all this? And, for Pete’s sake—whose idea was the color chart?

Mr. Parkinson also knows (certainly now via the Warning Letter) that Baxter also has had an insect problem in their saline solution. So if I were Mr. Parkinson, I would be asking around whether someone in his organization was preparing an insect chart.

Class Assignment: Go to the following link and research all the Warning Letters across all the Baxter operating units. (1) How many do you count over what time period? (2) What are the common themes and underlying messages? (3) Outline a high-level corporate strategy for Mr. Parkinson to become an anticipating organization with respect to taking responsibility for the product quality/regulatory compliance.

http://www.fda.gov/ICECI/EnforcementActions/WarningLetters/default.htm#browse.

The QA Pharm