Fixing OTC production problems is a top priority for new J&J CEO

Resolving manufacturing problems so Johnson & Johnson can get its once well-regarded consumer brands back in consumers' hands is Alex Gorsky's first priority as he officially takes the reins as CEO today.

"We've got to address the operational issues with our consumer brands," Gorksy, who succeeds the retiring William Weldon, told CNBC in one of a number of interviews Wednesday as he did damage control in advance of today's meeting. 

For what must seem like a lifetime now, J&J ($JNJ) has been losing market share in the OTC arena as its own products were recalled time and again. Problems ranged from bacterial contamination to packages that contained chipped pieces of other drugs because production lines had not been thoroughly cleaned at its key OTC plant in Pennsylvania. Products like Tylenol, Motrin and Rolaids have been in short supply, if available at all, as quality failures within McNeil Consumer Healthcare cascaded.

The recalls and lost market share have cost the company $1.5 billion, The Wall Street Journal reports, and landed it under the microscope of FDA investigators. It also is spending more than $100 million to retool the Fort Washington, PA, plant and is making investments at other manufacturing facilities as well. While it expects to get production of some of its brands ramped up this year, the Pennsylvania plant will not be ready for full production until 2014, about a year later than earlier projected. 

Of course, there are other issues that Gorsky must address with shareholders today. The company just lost a $1.1 billion verdict related to overly aggressive marketing of its Risperdal drug, and that litigation is far from over. It also has faced litigation and recalls for implant products that have failed.  

For all of those problems, Gorsky will probably have to start his tenure with apologies. He began that on Wednesday.

"We've let our patients down--mothers and fathers that depend on us," Gorksky said. Interesting that shareholders were not mentioned in that mea culpa.

- the CNBC story
- see what the WSJ has to say