Hospira says Chairman Christopher Begley’s impending retirement is unrelated to quality problems at manufacturing plant or recent investor criticism.
The company claims plans for Begley’s departure – signed-off by the board on December 7th – have been in place since he stepped-down as CEO in March 2011 as part of what it said was a progress plan to “transition responsibilities” to Michael Ball.
Hospira told in-PharmaTechnologist that the strategy to replace 59-year old Begley with Jack Staley, 70, as non-executive chair is also another step in the board's succession plan, and has nothing to do with recent situations.
When asked if pressures from investors had anything to do with the speed of Begley’s departure, Tareta Adams, director public affairs, replied: “There are no other factors influencing the timing of his retirement.”
“Investors have known of Chris’ retirement path... but the ultimate decision [to step down at the end of the year] wasn’t made until December 7th. Once the decision was made, the investors were made aware.”
Hospira has come in for investor criticism in recent months - particularly in relation to good manufacturing practice (GMP) quality problems at its Rocky Mount site, North Carolina .
The situation reached a head at the beginning of the month, when Hospira's share price fell 49 per cent year on year; which was the steepest drop of any healthcare company in the Standard & Poor’s 500 Index, according to Bloomberg.
At the time John Rogers of Ariel Investments LLC said: “Clearly the past [Hospira] leadership should be responsible.”
And, in light of Begley's decision to step down as chair Michael Waterhouse, an analyst at Morningstar Inc was similarly critical. He said: “Everything that has come to light has increased the criticism of (Mr. Begley's) tenure at Hospira,” adding that the departure is “probably what needed to happen considering all that's gone on.”
Fixing a hole
The company – which makes a third of the world’s market for specialty generic injectable drugs – says it is making headway solving issues at its Rocky Mount plant with help from external consultors IHL and Quintiles.
Adams added: “Hospira leadership met with the FDA to submit our comprehensive remediation plan for Rocky Mount, which was developed in partnership with third-party regulatory experts.
“Our remediation plans focus on implementing new site leadership and bringing in third-party assistance and oversight from regulatory consultants IHL and Quintiles.
“Both organizations are known for their in-depth knowledge of the FDA's requirements, and we believe that we can use their proven expertise to strengthen our efforts.”