FDA finds grime at J&J plant, urges use of generics

WASHINGTON (Reuters) - U.S. inspectors found thick dust and contaminated ingredients at the Johnson & Johnson plant that produces Children’s Tylenol and dozens of other products that were recalled last week.

A combination photo shows Concentrated Tylenol infants drops 1oz (L), Children's Tylenol Suspension 4oz and Children's Tylenol dye free suspension 4oz bottles which are being recalled by Johnson & Johnson's McNeil Consumer Healthcare unit. REUTERS/Tylenol/Handout

A Food and Drug Administration report released on Tuesday said its inspectors found thick dust and grime covering certain equipment, a hole in the ceiling and duct tape-covered pipes at the Fort Washington, Pennsylvania, facility that made 40 products recalled last Friday.

Inspectors also found raw ingredients contaminated by an unspecified bacteria, a lack of quality control procedures and poor handling of complaints, according to the report dated April 30.

The findings were a further blow to J&J’s reputation, as the FDA later on Tuesday urged parents to choose private label alternatives for the over-the-counter medications and said it was weighing possible further regulatory action.

“Consumers should not use these products,” Deborah Autor, director of the Office of Compliance at FDA’s Center for Drug Evaluation and Research told reporters in a conference call, even though the chance of getting sick from the recalled products was “remote.”

There were 46 consumer complaints about dark material in the liquid products between June 2009 and April 2010, according to the FDA report.

J&J, which has issued four major product recalls in the last year, said on Tuesday that the quality problems at the plant “are unacceptable to us” and that it would continue to work closely with the FDA to fix them.

The company has suspended production at the plant.

“We will not restart operations until we have taken the necessary corrective actions and can assure the quality of products made there,” said a statement from J&J’s McNeil Consumer Healthcare unit.

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On Saturday, the FDA urged consumers to stop using liquid Tylenol, Motrin, Benadryl and Zyrtec for children and infants after a broad recall late on Friday.

Investors have largely shrugged off the recall as a minor financial concern for J&J, maker of a wide variety of devices, medicines and other consumer products. While the Tylenol brand is closely connected with its public image, it amounts to a tiny fraction of nearly $62 billion in annual sales.

“The latest recalls of children’s Tylenol probably means there’s just less upside to J&J’s earnings estimates,” said RBC Capital Markets analyst Glenn Novarro. “They can manage the expense side to make up for this. J&J just doesn’t miss numbers.”

But officials at the FDA, which has vowed closer industry oversight under the Obama administration, said the recall served as an example of companies’ responsibility to ensure the quality of the products they make.

“While the potential for serious health problems is remote, Americans deserve medications that meet FDA standards for quality, safety and efficacy,” FDA Commissioner Margaret Hamburg told reporters.

The FDA’s report said inspectors found raw material used to manufacture several lots of Children’s and Infant’s Tylenol was contaminated with bacteria, but none of the finished drug product sampled tested positive.

Agency inspectors will complete a more detailed, narrative report for FDA officials to evaluate and determine if further action is needed, the FDA’s Autor said. That could include sending a warning letter, seizing products, seeking a court order to halt manufacturing or pursuing criminal penalties.

J&J survived a massive recall of intentionally contaminated Tylenol products in the 1980s and its handling of the matter is widely studies as as a model business and public relations case.

Branding expert Robert Passikoff said so far the company has done everything right in handling the latest recall.

“There’s no way to excuse it and J&J isn’t. What they’re looking to do is fix whatever the problems are,” said Passikoff, head of Brand Keys Inc. Customers are loyal to the Tylenol brand “and that goes a long way.”

J&J shares closed down 1 percent at $64.70 on Tuesday, underperforming the 0.6 percent decline in the pharmaceutical sector as measured by the Arca Pharmaceutical Index. The stock is up 23 percent since hitting a low of $52.60 a year ago.

A full list of more than 40 affected products made by McNeil Consumer Healthcare can be found at

To view the FDA's inspection notice, click on:

Additional reporting by Lisa Richwine in Washington and Ransdell Pierson in New York; Editing by Michele Gershberg, Toni Reinhold and Tim Dobbyn