Think Hospira ($HSP) has found itself in the middle of enough drug shortages? Perhaps not, says one analyst. RBC Capital Markets' Shibani Malhotra posits that the injectable-drugs company has the kind of production problems that require long-term attention to fix, Bloomberg reports. And they just might lead to an FDA consent decree, too.
The extent of the problem is illustrated by Hospira's $375 million commitment to manufacturing upgrades that will get it back in the FDA's good graces. As MedCity reports, much of that is earmarked for a plant in North Carolina that's been a vortex of trouble. It's hiring new leadership and has already brought in regulatory consultants.
Rewind a bit to 2009, when Hospira had to recall two drugs because of equipment failures at its Clayton, NC, plant, and then fast-forward to 2010, when the company recalled the same two drugs again. Hospira has been working to square its operations with the FDA, but inspectors issued a Form 483 in April about problems at yet another facility.
The FDA may be looking at a consent decree to make sure Hospira's multiple problems are fixed, Malhotra tells Bloomberg. The company's manufacturing issues are "far greater than investors realize," the analyst said, and violations have been found in "multiple facilities, perhaps even globally."
For its part, the company says it's working to satisfy the FDA's concerns. "Hospira has an unwavering commitment to quality and safety," a spokesman told Bloomberg.