The one-time charge, estimated at $120m (€94m), relates to the recall of several over-the-counter (OTC) products and improvements to the facility where they were manufactured. While making the improvements Novartis has closed the Nebraska manufacturing plant at the centre of the problem.
In a 13-page Form 483 the US Food and Drug Administration (FDA) cited repeated failures to look into quality concerns raised by patients. The unit also failed to tell the FDA about complaints by consumers.
Problems raised in the 483 were identified during an inspection last summer but some date back to earlier FDA visits. During a 2010 inspection the FDA found Novartis failed to extend investigations to all potentially affected batches and this shortcoming was observed again the following summer.
In response Novartis has suspended production at the Nebraska plant, which accounts for less than two per cent of total sales, and is unable to say when operations will resume. As well as fixing the Nebraska plant Novartis said it will strengthen quality standards across its manufacturing network.
“We are committed to a single quality standard for the entire Novartis Group and we are making the necessary investments and committing the right resources to ensure these are implemented across our entire network”, Joseph Jimenez, CEO of Novartis, said.
Following publication of the 483 Novartis began a voluntary recall of batches of four OTC products, Excedrin, NoDoz, Bufferin and Gas-X Prevention. Bottles of these products may contain other Novartis drugs, as well as broken or chipped tablets.
“Mixing of different products in the same bottle could result in consumers taking the incorrect product and receiving a higher or lower strength than intended. This could potentially result in overdose, interaction with other medications a consumer may be taking, or an allergic reaction”. Novartis said.
Novartis is yet to receive reports of adverse events linked to the recalled products, which have been distributed to wholesalers and retailers across the US. Patients who bought affected batches will be refunded by Novartis.