Earlier this year, Australia's biggest manufacturer of over-the counter medicines, Pan Pharmaceuticals, was forced to withdraw hundreds of products for failing to meet manufacturing standards. Now, the country's second largest pharmaceuticals manufacturer, Australian Pharmaceutical Industries, has suffered the same fate.
Australia's Therapeutic Goods Administration suspended API's after regulators found that a manufacturing plant in Kingsgrove, Sydney, was in poor condition. An audit of API subsidiary Soul Pattinson Manufacturing's facility revealed serious breaches of manufacturing standards, relating primarily to the rundown condition of the plant and equipment, as well as inadequate quality control systems.
However, there is one fundamental difference between this case and that of Pan; there is no suggestion that API has undertaken any fraudulent activity. Pan stands accused of ingredient substitution and the manipulation of test results. Soul Pattinson has six weeks to bring the plant back into regulatory compliance.
The TGA suggested that the breaches may be related to a deliberate cost-saving action by the management to let the premises run down before a planned relocation of the plant.
Australia's Parliamentary Secretary for Health Trish Worth said the government was considering implementing a new programme of monitoring the pharmaceutical industry to ensure that there are no other companies flouting regulations and that the public could have faith in Australian-made products. She stressed that none of Soul Pattinson's 900 products was deemed unsafe.
Meanwhile, just few days after KPMG rejected a rescue bid for Pan from former chief executive Jim Selim and millionaire Fred Bart, the auditor appears to have changed its mind.
After rejecting the bid on a number of grounds, including that it released Selim from any legal responsibility KPMG's Tony McGrath said it now appears favourable. However, it "requires further development before it is in a form that could be recommended to creditors," he added. The next creditors' meeting is due to be held on 23 September.