Following several years of legal back-and-forth, AMAG Pharmaceuticals has lost its bid to claim insurance coverage for a manufacturing snafu that took place at a Pfizer facility back in 2017.
Late last week, a district judge in Massachusetts sided with AMAG’s insurer, American Guarantee and Liability Insurance Company (AGLIC), denying AMAG’s claims of business losses caused by “direct physical loss of or damage to” Pfizer’s property, which previously served as a contract manufacturer for the later-withdrawn preterm birth drug Makena.
As a result, AMAG will not receive coverage for the incident, which occurred at Pfizer’s Hospira legacy plant in McPherson, Kansas, according to court documents made public last Friday.
The decision comes after AMAG filed a lawsuit against AGLIC in April 2021, arguing that the company wrongly denied coverage for losses it suffered following a technical hiccup in the so-called M6 filling room of Pfizer’s McPherson plant.
Back in 2017, Massachusetts-based AMAG owned the marketing rights to the controversial preterm birth drug Makena, which was ultimately pulled off the market last year. During its marketing run, AMAG contracted Pfizer to produce Makena at the M6 space in its McPherson plant, the court documents state.
AMAG’s complaint ultimately comes down to a piece of equipment in the Pfizer plant dubbed the M6 trayer, which helps produce freeze-dried products. Given that Makena is a liquid-filled product, the trayer was never used specifically in its manufacture.
In November of 2017, environmental monitoring alarms sounded in Pfizer’s M6 filling room, indicating that particulates had entered the manufacturing space.
It took Pfizer more than 17 hours to suss out the cause of the alarms. Upon recognizing the problem—a leak of filtered compressed air to one of the M6 trayer’s lyophilized rake arms—staffers took just minutes to fix the issue, according to the court documents.
In AMAG’s complaint, the company’s then-VP of quality, Oscar Sanchez, testified that the only way the air leak could have occurred was if part of the air line had been broken off.
Problem is, Sanchez never saw the air line in question, nor did he know what the line or its connection looked like, the legal filing states.
Pfizer, for its part, said the air leak was the result of a loose fitting, and the company simply needed to tighten a bolt to fix the problem.
The issue caused a mold to accumulate on the M6 trayer, prompting Pfizer to shut down all manufacturing in the M6 filling room from Dec. 9, 2017 through Jan. 20, 2018.
Prior to the shutdown, Pfizer had cranked out four batches of Makena, the court documents reveal. A risk assessment convinced Pfizer not to release those lots following the air leak and mold incident.
In turn, AMAG claimed that the failed delivery of the Makena lots caused more than $30 million in net revenue loss to the company, plus other covered losses.
Pfizer’s McPherson plant has quite the checkered past.
The facility, which Pfizer received in its $15-billion buyout of Hospira in 2015, received a warning letter in early 2017 for longstanding problems, including complaints of particulates turning up in product vials. The FDA at the time blasted Pfizer for failing to prevent contamination and neglecting to send the agency field alerts about the complaints.
In December 2018, the FDA slapped the Kansas facility with a Form 483, dinging Pfizer on eight observations, seven of which were repeats—with some noted at least twice before.
To fix the problems and upgrade further, Pfizer made "substantial investments to modernize its sterile injectables network, which includes installing new lines and equipment, hiring additional colleagues, and establishing redundant sources of supply, among other initiatives,” a Pfizer spokesman told Fierce back in 2021.