Earlier this month, FDA inspectors completed an inspection of the plant’s device quality systems and cited the company with 10 objectionable observations in the warning, CEO Michael Ball said in the company’s fourth-quarter results conference call on Wednesday.
Ball did not provide any details on what was included in the 483 but called it “particularly rough,” though he said “many” of the observations were repeats from an inspection in July 2012.
“The observations reinforce our own assessment that there is still a lot of work to be done within our device operations,” Ball said. In August the company also received a warning letter for its device plant in Costa Rica.
In order to take more preventive action, Ball said Hospira is developing a longer-term MMS (Medication Management Systems) strategy “aimed at modernizing and streamlining the device platforms to best address our customer needs and the nearer-term remediation issues” and include input from the FDA.
The US FDA on Tuesday also began its re-inspection of the company’s Rocky Mount, N.C., facility with five inspectors, which Ball said “could be extensive and lengthy.” The facility was operating at less than 70% capacity in February 2012, though none of the company’s executives would clarify whether that capacity has gone up or down.
The amount of money the company will spend beyond the $375 million on current remediation efforts also seems entirely dependent on how well the FDA inspection of the Rocky Mount facility goes. Ball said that “future charges are not expected to be significant compared to prior years. This assumes that the reinspection at Rocky Mount goes well, and that the FDA accepts our current device field notifications.”
Meanwhile, work at the company’s other plant in Clayton, N.C., seems to be progressing somewhat. The plant, which shut down last year and caused propofol shortages, is now manufacturing propofol batches and “building inventory in the fourth quarter of 2012 for an early 2013 re-launch,” Ball said.
“Consistent with our re-launch plans, we are starting with the 20mL presentation and intend to follow with the 50mL and 100mL offerings in the second quarter,” he added, noting that the company is pricing the propofol “above current market levels, commensurate with the significant resources required to bring the product back to the market.”
Earnings, Growth and Positives
Despite the costly remediation efforts and manufacturing struggles, Hospira still saw 2012 fourth quarter net sales increase 8% from the same quarter in 2011.
Ball also highlighted the company’s announcement from August to acquire an API manufacturing and related R&D facility from Orchid Chemicals & Pharmaceuticals to assure its supply of beta-lactam antibiotics. He also said the company advanced its India manufacturing investments – including the building of a plant in Vizag, India and “expanding capacity at both our fill-finish beta-lactam antibiotic facility, and our joint venture plant.”
For 2013, Hospira is expecting slight growth, with net sales projected to grow between 1 and 3%, while adjusted operating income is expected to be in the 11 to 13% range.