Johnson & Johnson's (JNJ) McNeil Consumer Healthcare unit said Thursday it will probably not be able to resupply retailers with most of the children's medications it produced at its Fort Washington, Pa., manufacturing facility for the rest of the year. The facility was shut down in May after severe manufacturing problems were discovered in the plant following the massive recall of medicines produced there.
The recalls of more than 135 million bottles of infant and children's medicines, including Children's Tylenol, Infants' Tylenol, Children's Motrin and Children's Benadryl, began last year. But it was only after the last product recall in April that the U.S. Food and Drug Administration released its seriously unflattering inspection report of the plant.
Among the problems, including manufacturing process, control and procedure issues, such as inadequate laboratory facilities and untrained staff, investigators found grime, dust, a hole in the ceiling, clutter and bacteria-contaminated raw ingredients. Production was then suspended at the facility.
The recall also led to a House committee investigation that uncovered phantom recalls, contradictory accounts and cover-ups.
According to the committee, the recalled products account for 70% of the children's over-the-counter medicines sold in the U.S. With the plant closed, many are concerned about shortages of these medicines. The company said in a release it has not decided when it will resume operations at the plant.
On its website, the FDA notes that there are a number of other products on the market that are intended for use by infants and children. It recommends consumers check the labels and consult with a pharmacist or other health care professional. "FDA does not anticipate that there will be a shortage of alternative products," it says.
The medications made at the plant generated about $650 million in sales over the last three years, a small fragment of J&J's $15.6 billion in revenue in the first quarter of 2010. While some claim to see downward pressure on J&J share price following these troubles, the stock's performance was generally in line with the rest of the market.
Basics of Diversification
Learn one of the fundamental concepts of building a portfolio.View Course »