FDA considering criminal penalties for J&J unit

The FDA may pursue criminal penalties against McNeil Consumer Healthcare, the Johnson & Johnson (NYSE: JNJ) unit that's responsible for the massive recall of children's drugs. At least that is the word from Deputy Commissioner Joshua Sharfstein, who is testifying today on Capitol Hill about the recall.

In written testimony prepared for that House committee hearing, Sharfstein said the FDA is working with J&J "to address its systemic quality issues" at McNeil, but that it's also mulling its options for enforcement actions against the company. "FDA is also considering additional enforcement actions against the company for its pattern of non-compliance which may include seizure, injunction, or criminal penalties," Sharfstein said in the testimony.

Sharfstein's testimony also indicates that the FDA could use more authority to handle these sorts of situations. For instance, the ability to order recalls. Though the agency can do so in some cases, in most, it's up to the company to declare a voluntary recall. Rep. Edolphus Towns (D-NY), who chairs the House Committee on Oversight and Government Reform, has a more basic question: Was FDA on top of the McNeil situation? "Were they aware of what was going on and at what point did they know?" asked Towns, as quoted by the New York Times

During the hearing, Towns says, we can expect questions about any staff cuts at McNeil that may have spawned manufacturing shortfalls. "I ... want to find out if there was any shaving or cutting of staff that led to these problems," he noted. As you know, there have been some reports that J&J cut key staff that might have caught the problems before they got out of hand. Records do show that McNeil has cut at least 478 jobs at its troubled Fort Washington, Penn., plant since 2005, the Los Angeles Times reports, but it's unclear what effect those cuts might have had on quality control.

There will be much more info about the recall--and McNeil's manufacturing woes--after today's hearing. We'll keep you posted, but in the meantime we offer a link to the hearing webcast below.

- find the link to the hearing webcast
- see Sharfstein's prepared testimony
- see the WSJ story
- get more from the NYT
- check out the LA Times coverage