The FDA has released an inspection report that helped touch off the latest Johnson & Johnson recall, and it's not pretty. The agency found "serious" problems at the McNeil Consumer Healthcare plant, where children's Tylenol, Motrin, and other over-the-counter kids' medicines are made.
Raw materials were found to be contaminated with bacteria, but they were used anyway, the agency found. Quality control was lacking. And the company didn't investigate potential manufacturing mess-ups, even after receiving consumer complaints about medicines contaminated with black particles, the report notes.
"The findings are serious," FDA official Deborah Autor tells the Washington Post. The agency is still investigating, and it's mulling further action that could range from warning letters to criminal penalties. "We cannot yet say whether further action is warranted," Autor adds.
Industry analysts didn't expect J&J to feel any immediate financial effects from this latest recall. It's the damage to the company's reputation that could hurt in the long term. "If this expands or becomes more of an issue and J&J's reputation suffers, that's when it could begin to become problematic," Edward Jones analyst Linda Bannister tells Bloomberg. "Some observers are starting to question the integrity of the supply chain," Miller Tabak analyst Les Funtleyder tells the Los Angeles Times. "The trend we've seen is not positive."
FDA inspectors are writing up a new version of their report to help investigators determine just what went on at the plant. Meanwhile, J&J has shut down production there, as it works to fix the problems found. And the company says it's looking to improve all its manufacturing operations. "Early this year, we initiated a comprehensive assessment of quality and manufacturing systems across our operations," McNeil says in a statement. "We have committed extensive internal resources to this effort, and brought in independent outside experts to assist us." Stay tuned.