* Different Pepcid flavors found in same packages
* FDA cites test procedures, complaint handling
* Analyst cites remote risk plant could be shut down
* J&J shares down 2.5 percent, Merck down 1.3 pct
(Adds company comments, describes plant problems)
By Ransdell Pierson and Lisa Richwine
NEW YORK/WASHINGTON, July 21 U.S. inspectors
found problems with test procedures, record-keeping and
handling of consumer complaints at a Johnson & Johnson (JNJ.N)
and Merck & Co (MRK.N) manufacturing plant in Lancaster,
Pennsylvania, a report released on Wednesday said.
The U.S. Food and Drug Administration report noted numerous
instances where consumers complained that different products
were packaged together, for instance berry-flavored Pepcid
chewable antacid tablets were mixed in with mint-flavored
Shares in J&J, which runs the plant as part of a joint
venture with Merck, fell 2.5 percent. Merck slipped 1.3
percent. The facility makes widely used consumer brands,
including heartburn drugs Pepcid and Mylanta.
"How do you get mint into berry if you're controlling your
manufacturing process?" said Jan Wald, an analyst with Noble
Financial Capital Markets who predicted it could be costly for
J&J to fix the litany of quality control lapses cited in the
J&J is grappling with quality control lapses at two of its
other plants that have forced it to recall tens of millions of
bottles of Tylenol and other popular consumer medicines.
On Tuesday, J&J said the massive recalls would trim its
full-year earnings and said it was the subject of a criminal
investigation by the U.S. prosecutor in Philadelphia.
Morningstar analyst Damien Conover said there is "a remote
chance" the problems at the Lancaster plant, enumerated by the
FDA on Wednesday, could also force J&J to shut it down.
"Today's report highlights the problems, which make J&J's
situation a little more hairy," Conover said. "But it's hard to
tell if they will warrant suspension or closure of the
FDA SAYS INFORMATION WAS HARD TO GET
The new FDA report listed 12 shortcomings uncovered by
agency inspectors who visited the Lancaster site in late June
and early July.
Records related to drug production "were not made readily
available for authorized inspection," the report said. FDA
inspectors said they had to request information on specific
topics as many as 10 times before receiving full information.
"Clearly the FDA doesn't feel the responses to their
questions were timely, or in some cases adequate and thinks the
quality control processes were not effective," said Wald.
Overall, Wald said the FDA observations focus on the
quality of documentation being performed at the plant, rather
than dirt or contaminated products -- more serious types of
problems cited by FDA at the now-closed J&J Fort Washington,
J&J on Tuesday cut its 2010 profit forecast because of the
repeated recalls of painkillers Tylenol and Motrin and the
allergy drugs Benadryl and Zyrtec and the expense of revamping
the deficient Fort Washington plant. J&J said the facility will
be out of commission until the second half of 2011.
Johnson & Johnson on Monday confirmed it had been cited by
regulators for problems at the Lancaster plant. On Wednesday,
the company repeated an earlier statement that it "takes the
issues raised by the agency seriously" and will address the
concerns as quickly as possible.
Merck, whose Chief Executive Richard Clark was formerly
head of manufacturing at that drugmaker, made similar remarks
in its own statement. Merck said the two partners "will be
working to ensure that the issues raised by the FDA are
addressed in a comprehensive and timely manner."
(Reporting by Lisa Richwine and Ransdell Pierson, editing by
Michele Gershberg and Bernard Orr)