July 15, 2002


 Schering-Plough agrees to pay FDA $500 million and bring factories into compliance

Temporarily halts production of Banamine, Nuflor, and Optimmune

Posted July 1, 2002

Schering-Plough Corporation signed a consent decree of permanent injunction with the Food and Drug Administration in May, agreeing to take measures to ensure compliance with the FDA's current good manufacturing practices at the company's plants in New Jersey and Puerto Rico.

The company also agreed to pay $500 million to the U.S. Treasury. It is the largest monetary settlement in FDA history and will disgorge profits the company made on drug products produced during the three years prior to the signing of the consent decree, according to the FDA. Additionally, the company has agreed to pay up to $175 million in future profits if it fails to adhere to the time lines established in the decree.

The decree has been filed in the U.S. District Court in New Jersey.

The FDA took action against the company after inspectors found serious violations of CGMP regulations during 13 inspections at four New Jersey and Puerto Rico facilities since 1998. The violations were related to facilities, manufacturing, quality assurance, equipment, laboratories, and packaging and labeling.

Robert Consalvo, a spokesman for Schering-Plough, said that although the company's procedures may not have met CGMP standards, the products made at the Puerto Rico and New Jersey plants were monitored, using the company's own tests, and met Schering-Plough specifications.

"[The products are] still safe and effective," Consalvo said, emphasizing that none of the products has been recalled.

Consalvo said the company is testing the manufacturing procedures for each of the products made at the Puerto Rico and New Jersey plants and is providing the FDA with proof that the products are satisfying CGMP regulations at each step of the manufacturing process.

The process will be time consuming and will reduce the availability of some Schering-Plough products, Consalvo said.

Ninety percent of Schering-Plough's drug products are manufactured at the Puerto Rico and New Jersey plants, and about 125 prescription and over-the-counter drugs will be affected by the terms of the consent decree, according to the FDA.

Production of most of the drugs will continue on a reduced scale, while tests are conducted simultaneously, Consalvo said. The production of 73 additional products, however, will be suspended as a condition of the consent decree, according to the FDA.

Some older products will be discontinued, Consalvo said, but most products will return to production after the FDA's requirements have been met.

Banamine, Nuflor, and Optimmune, all veterinary products, are among the drugs that are temporarily out of production. Consalvo explained that Banamine, Nuflor, and Optimmune are manufactured under sterile conditions, and testing could compromise the product. Therefore, production will stop until the necessary tests have been completed.

Meanwhile, the supplies of Banamine, Nuflor, and Optimmune in the United States will be limited to the stock that distributors have available.

"There will be some delay in our getting products out to the trades," Consalvo said, adding that he could not estimate how long Banamine, Nuflor, and Optimmune will be out of production. "We are going to try [to complete the testing] as quickly as we can."

Consalvo said he was unaware as to whether any human products commonly used by veterinarians would be affected.

Production in Schering-Plough plants outside the United States will not be affected by the consent decree and the company is looking into the possibility of legitimately using foreign sources to supply the drugs.

Dr. Lester M. Crawford, the FDA deputy commissioner, said the FDA's action against Schering-Plough sends a message to the manufacturers of pharmaceuticals that violations of federal regulations will not be tolerated.

"This action is another clear sign that the FDA will continue to enforce the rules and regulations requiring companies to carefully control and monitor their processes used to make pharmaceuticals and other products, so that those products will be safe and effective," Dr. Crawford said. "Manufacturers who choose to wait until FDA inspectors find violations rather than policing themselves will find that they have made a poor and costly decision."

The FDA will continue to monitor Schering-Plough for at least five years. The company will be required to conduct regular audits of its operations and make reports to the FDA, and the FDA will periodically inspect Schering-Plough operations.