Saturday, July 23, 2011

J&J Says "It's McNeil's Fault, Nyuck, Nyuck, Nyuck"

Fierce Pharma has;

July 22, 2011 — 10:06am ET | By

Johnson & Johnson's quality control problems were caused by mismanagement at McNeil Consumer Healthcare, a board committee investigation found. The report places the blame for a rash of recalls--not only the massive withdrawals of McNeil products, but also substandard prescription drugs, devices and contact lenses--squarely on lower-level execs, letting senior executives off the hook, Bloomberg reports.

McNeil quality-control staff and production folks didn't play well together, and the division suffered from "an emphasis on production volume" rather than on compliance, the panel's report states. J&J's consumer division leadership should have watched McNeil more closely, especially as it worked to integrate Pfizer's consumer health division, the committee said. "[S]ome McNeil employees may have lost focus and commitment to maintain quality standards," Bloomberg quotes.

True, integrating the Pfizer operation was a big job, with thousands of new products to handle. New manufacturing lines were put in at Fort Washington, PA, and Las Piedras, Puerto Rico--both factories that would end up on the FDA's hit list for quality lapses. And McNeil's management suite had a revolving door at the time, the report notes, so company leaders didn't know what was happening at the plant level.

The board committee praised J&J execs for acting quickly once they discovered the manufacturing issues. It also denied any red flags or "systemic failure" overlooked by top management--two allegations raised by shareholder lawsuits attempting to hold executives and board members accountable.

But the report also fingers restructuring at J&J for making the problem worse: Quality and compliance staff were cut by 35%, and the corporate types lost the authority to show up unexpectedly to audit subsidiaries' operations. Plus, a "virtual hiring freeze" hampered McNeil's ability to hire quality-review staff. Someone in J&J's senior management obviously signed off on those decisions. And while top management may not have known the depth of McNeil's problems, one might argue that they should have known. Absolving J&J's leadership of responsibility for the widespread problems may help dispose of shareholder claims, but it won't force them to do the tough soul-searching required to make a company better.

- read the Bloomberg coverage
- get
more from Pharmalot

Related Articles:
J&J boosts sales, profits, but analysts wary
Musty smell touches off yet another J&J recall
Finding the source of J&J's river of woe
J&J splits off troubled consumer-drug unit

Thank You Fierce Pharma and Ms Staton

"Testimony at trial indicated that the profit margin for sales of Risperdal was 97% or $28.90 Billion for the period of 1994-2010"

But J&J's Board and Top Execs didn't Know what their subordinates were doing behind their backs, because, ...... read the Last paragraph of Ms Staton's report again.

No comments: