Executive suite not spared in J&J reorg tied to quality concerns

Management at the factory level feel the heat under any FDA consent decree, but a shake-up at Johnson & Johnson ($JNJ) this week showed that the pressure can extend into the executive suite.

Two J&J group chairmen and long-term executives left this week, presumably because of ongoing difficulties in the company's consumer health business, The Wall Street Journal reports. The departures come less than a year after manufacturing problems sparked a revamp that gave them new authority in consumer health.

Patrick Mutchler, who was put in charge of overseeing the McNeil Consumer Healthcare unit in April, is retiring after 35 years at the company. The company also confirmed that Pericles Stamatiades, a 28-year J&J veteran, is also leaving. He was named strategist for consumer businesses in the same April reorganization. Mutchler's duties will be taken over by Roberto Marques, who heads J&J's consumer businesses in North America. Stamatiades' responsibilities are being parsed out among other management.

A string of recalls of J&J products began in late 2009 affecting products including Tylenol, Benadryl, Motrin and Zyrtec, prompting FDA intervention and congressional hearings. McNeil Consumer Healthcare immediately closed its Fort Washington, PA, plant after an April 2010 recall of more than 136 million children's and infants' products.

McNeil entered into a consent decree with the FDA in March covering plants in Lancaster, PA, and Las Piedras, Puerto Rico, in addition to the Fort Washington facility, which is undergoing a $100 million renovation.

Johnson & Johnson moved some of the affected products to other plants but problems have persisted. Just in August the company yanked another 2.5 million units of Tylenol.

U.S. sales at McNeil fell to $1.4 billion last year, from a peak of $3.1 billion in 2008, WSJ notes, citing Fargo Securities.

Suggesting, however, that the quality control issues CEO William Weldon wants addressed extend beyond McNeil, Johnson & Johnson said day-to-day operations at McNeil Consumer Healthcare will continue to be led by the executive named in April to oversee the unit.

In a statement sent to FiercePharmaManufacturing, the company said: "The U.S. OTC business will continue to be operated as a separate, integrated business in order to maintain its focus on quality and compliance, and on the successful reintroduction of OTC medicines in the U.S. market. The business will continue to be led by U.S. OTC President Denice Torres."

- here's the WSJ story

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