Mylan's recent recall of injected cancer drugs, was a hint that all was not well at some of the plants Mylan got two years ago in its $1.75 billion deal for Indian sterile injectables producer Agila Specialties. But just how deep those problems are came to light today when the FDA posted a warning letter for three of those Indian facilities, including one that was cited shortly before Mylan ($MYL) bought it.
The FDA said it knew Mylan had only recently bought the plants when the inspections started last year, but the FDA told Mylan President Rajiv Malik that the warning letter the agency had already issued should have been an indication of problems that needed tending to. Even without that, the FDA said, Mylan's corporate quality system should have picked up and done something about the long list of problems before the FDA stepped in. The agency acknowledged Mylan's intent to fix the issues, but said until it does, it will not accept any applications for new or generic drugs from the three facilities.
In a statement Tuesday, Mylan CEO Heather Bresch said, "Since Mylan acquired the Agila injectables businesses in December 2013 to create a leading global injectables platform, we have been taking extensive action to integrate the Agila business into Mylan's One Quality Standard, and to ensure our leading position as a high quality, reliable source of injectables for the long term. As part of this ongoing process, we have a deep and unwavering commitment to quality everywhere we operate. We have been and will continue to work diligently to address all of the FDA's observations and have made important progress."
All three plants are in Bangalore and the FDA noted a host of problems at each that raised serious concerns about contamination. There were concerns over the quality of the gloves employees used in sterile areas, which inspectors said often had pin holes that could lead to direct exposure. That is the same issue that the FDA noted when the plant was still owned by Strides Arcolab. The warning letter notes a lack of smoke studies in some cases, vials being rejected without explanation, and hundreds of out-of-action-level (OAL) results from microbial testing. The agency was also concerned that Mylan was not investigating customer complaints about tainted products to find out what had led to the problems.
In fact, the FDA said, it was only in response to the inspection that one of the plants discovered the "foreign particulate matter" in some lots of gemcitabine, carboplatin, methotrexate and cytarabine, cancer meds manufactured at the sites, some of it produced for Pfizer ($PFE). The discovery led to an initial recall of 7 lots and then to an expanded recall of 8 more as testing found more issues.
While no drugmaker wants to face warning letter, this three-plant missive comes at a particularly inopportune time for the drugmaker. Mylan is in the midst of trying to pull off buyout of competitor Perrigo ($PRGO). Perrigo has steadfastly opposed the deal and Mylan's offer has gotten mixed reviews from proxy advisors.