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Able suspends manufacturing on QC violations

24-May-2005

US generic company Able Laboratories ceased all its manufacturing and recalled products yesterday after major problems emerged with its quality control procedures, reports Phil Taylor.

The company also said that it was withdrawing several new product applications in the US as a result of the debacle, which prompted chief executive Dhananjay Wadekar to resign towards the end of last week.

The latest revelation carved a further 30 per cent off Able's share price yesterday, which had already lost three quarters of its value when indications of the problems at the company first emerged last week. It was trading at $5.05 at the close of trading yesterday.

This is the latest in a string of quality control violations that have led to suspensions in manufacturing at plants serving the US market. Last year, Chiron caused shortages of flu vaccine when compliance issues were uncovered at a plant in Liverpool, UK, while earlier this year GlaxoSmithKline faced similar problems at a plant in Puerto Rico making an antidepressant medication and diabetes drug.

Able launched an internal probe after recalling several batches of drugs earlier this year because of improper laboratory testing and deviations from standard operating procedures were uncovered at its manufacturing facilities. It has now warned that further recalls are likely.

The generics company said in a statement that it did know what further actions it may have to take or what actions the US Food and Drug Administration and other government officials may undertake.

The extent of the compliance problems at Able suggests that it will have to sign a consent decree with the FDA. This commits the company to putting its house in order, but also lays it open to the risk of fines and complete closure of the offending plant if matters cannot be rectified.

The starkest example of this came in May 2002, when Schering-Plough agreed to pay a record $500m (€390m) fine after signing a decree to improve manufacturing standards at its facilities in Puerto Rico and New Jersey used for the production of its antihistamine Claritin (loratadine).

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