J&J hopes regulators will let Fort Washington plant reopen

McNeil Consumer Healthcare facility from Route 309.
McNeil Consumer Healthcare facility from Route 309. (MICHAEL S. WIRTZ / Staff Photographer)
Posted: July 18, 2013

Johnson & Johnson's top executives said Tuesday that they hope U.S. regulators will soon certify that their factory in Fort Washington is ready to resume making medicine.

The McNeil Consumer Healthcare facility, which made iconic brands such as Tylenol and Motrin, needs the Food and Drug Administration and a federal judge to say the company has complied with a consent decree before it can make the liquid versions of those once-popular nonprescription medications.

The plant ceased production in April 2010 after dozens of product recalls, some of which involved strange smells and floating particles in liquid medicine.

Former employees told The Inquirer in 2011 that in the late 2000s J&J added to manufacturing demands with more brands acquired from Pfizer while simultaneously driving out experienced midlevel managers in an effort to cut costs and raise profits.

"I can't comment on the validity of the comments made to you," J&J chief financial officer Dominic Caruso said in a conference call with reporters. "But I will tell you that the Fort Washington facility has been completely redesigned, consistent with the other manufacturing facilities in the J&J network, and we now have a quality management system that runs across our J&J facilities.

"The Fort Washington facility is just about ready for regulatory inspection in the back half of this year. As soon as the inspection is completed, we'll be ready to put that facility back on line. But even without the facility, we're already seeing 20 percent growth in the U.S. [over-the-counter] business this quarter."

J&J said that its second-quarter total sales increased 8.5 percent to $17.5 billion compared with the same period in 2012. The company said net earnings decreased 10.6 percent to $3.5 billion, partly attributable to nearly $600 million it set aside to cover litigation.

J&J's stock, which reached a 52-week high of $91.66 in early trading Tuesday, closed unchanged at $90.40.

With McNeil's plants in Lancaster and Puerto Rico operating under tighter scrutiny and production shifted elsewhere, 75 percent of brands are back on shelves, according to J&J.

The Fort Washington fix will end up costing $100 million, but, asked specifically about changes in management practices, Caruso said:

"The facility will be managed consistent with the overall changes we made in the J&J quality program on a global scale. So there are some changes that have been made and there is more consistency across the overall J&J enterprise in terms of quality standards.

"We have an ongoing commitment to attract the top talent in that facility, as we do with most facilities, and I think they will find it a very, very nice place to give their expertise to a company that is on the rebound in bringing brands back to consumers."

Though a Justice Department investigation continues, individual product lawsuits have been filed in state and federal courts, including in Philadelphia. Some involved McNeil products.

Contact David Sell at 215-854-4506, dsell@phillynews.com, or @phillypharma. Read his blog at www.inquirer.com/phillypharma.

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