Merck hit for plant problems

FDA cites the drug maker after Pa. plant inspections

01/08/02

BY ED SILVERMAN
STAR-LEDGER STAFF

Merck & Co. has been cited by federal regulators for numerous quality-control problems at a manufacturing plant where several important vaccines are made.

The Food and Drug Administration issued two enforcement reports -- extensive reviews of manufacturing practices -- following inspections of a Merck plant in Pennsylvania this past summer and fall, according to documents obtained by The Star-Ledger.

After the second report was compiled in November, the Merck executive in charge of vaccine operations at the West Point, Pa., plant took early retirement, according to a company memo.

The FDA found Merck improperly performed procedures for sterility, testing and documentation, among other things. They were noticed by regulators at the same time Merck bid on -- and lost -- a $428 million contract to make smallpox vaccine for the federal government.

Such inspections are routine in the pharmaceutical industry, but lengthy enforcement reports aren't -- the second report was 22 pages. Ultimately, Merck could face stiff fines if enough serious violations are found over a prolonged period.

Meanwhile, people familiar with the situation say production at the plant has been halted while new supervisors are trained. Between 300 and 400 people work there.

This is only the latest reversal of fortunes for the Whitehouse Station drug maker, which makes some of the best-known medicines. Recently, patents expired on some big-selling drugs, its Vioxx painkiller missed sales targets and was linked to cardiovascular problems, and company officials scaled back their earnings outlook.

"Merck's had a particularly tough year. And they've got a way to go to get back on track," said Mark Ravera, an analyst at Mehta Partners, a health-care investment firm. "Something like this would not be a welcome addition to their burdens. They certainly don't need any more bad press. But the FDA has been really cracking down on everybody."

Indeed, the FDA review is another example of how regulators, who have been widely criticized for the way they approve new drugs, have become stricter about enforcing manufacturing problems. In 2000, the FDA levied a large fine on American Home Products Corp. and has recently cited plants run by Schering-Plough Corp. and Eli Lilly & Co.

A Merck spokesman, Greg Reaves, declined to comment on dealings with the FDA or the departure of the vaccines executive, James Laser. Reached at home, Laser, 55, declined to comment. "I don't think there are a whole lot of dots to connect."

Reaves also insisted any supply shortages are due to "voluntary" interruptions in production, which he attributed to maintenance upgrades and changes in manufacturing practices. But he stressed that shipments are proceeding.

Among the problems the FDA found at Merck:

·  Timely inspections weren't performed after noticing sterility failures.

·  Discrepancies in the number of rejected batches weren't documented.

·  Spreadsheets used to determine questionable results weren't verified.

·  Sufficient air pressure in the building wasn't maintained properly.

The FDA typically doesn't comment on inspections that haven't yet been resolved, but an FDA source said the Merck case remains open.

Products made at Merck's Building 29, part of a huge research and manufacturing facility in West Point, include Varivax, a chicken pox vaccine; a vaccine for MMR, or measles, mumps and rubella; and vaccines for Hepatitis A and B, the spokesman confirmed.

Vaccines generated only about $1 billion in sales for Merck last year out of total revenue of $21 billion. But Merck has repeatedly identified vaccines as a growth engine. For instance, the company is working on an AIDS vaccine.

"Vaccines aren't as big as Zocor," the cholesterol medication, said Hemant Shah, an independent analyst who tracks drug makers. "But it's still an important business."

Ed Silverman can be reached at esilverman@starledger.com or at (973) 392-1542.

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