UPDATED: Hospira finally up and running at its cost-cutting India plant

After dealing with two preapproval inspections and two dozen FDA observations, injectables specialist Hospira says it has gotten FDA approval and is ramping up production at its new plant in India.

In an SEC filing on Wednesday, the Lake Forest, IL-based Hospira ($HSP), which will soon be part of Pfizer ($PFE), said that with the FDA OK, it has started "limited commercial production at the facility."

The 1.1-million-square-foot manufacturing Vizag plant in Visakhapatnam, India, is key to the drugmaker, which expects it to significantly reduce production costs across its manufacturing network. It adds 500 million additional units of sterile injectable drugs to Hospira's supply chain annually. The original price tag for the facility was $200 million but ballooned to $450 million after the company decided to install visual inspection equipment that CEO F. Michael Ball said would help it avoid the quality pitfalls encountered by its troubled Rocky Mount, NC, plant.

The plant was slated to open at the end of last year but didn't pass its first FDA preapproval inspection in March of last year. Inspectors tallied up 10 observations. Hospira then received an untitled letter focused on two corrective actions. Ball told analysts several times that he expected the facility to open on time, but the next FDA inspection didn't happen until February. Following that 10-day inspection, the plant was issued another Form 483 with 14 more observations. But Hospira said Wednesday those issues are behind it and that with the FDA approval, it can expect to win "U.S. product approvals from this facility in the future."

The problems at Vizag were not the only ones the drugmaker is dealing with. A warning letter was issued to its facility in Irungattukottai, India, in May 2013 and the plant received another 23 observations in a follow-up inspection later that year. In a warning letter last year, the FDA cited a Hospira plant in Mulgrave, Australia, for failing to investigate the root cause of out-of-specification results for multiple batches of mitoxantrone, even after customer complaints. And in March of this year, the drugmaker received a warning letter for a facility in Liscate, Italy, chastising the drugmaker for not thoroughly investigating 103 customer complaints received over a two-year period about the discoloration of a product.

The FDA said when Hospira did investigate, its conclusions were shortsighted. It never occurred to the drugmaker that the cause might have been tied to faulty manufacturing. In fact, Hospira now has plants tagged with warning letters on four of the 7 continents: Europe, North America, Asia and Australia.

The drugmaker has gotten most of the issues at its U.S. pharma plants resolved. Ball recently told analysts that it got word from the FDA that the agency had lifted the warning letter for its long-troubled Rocky Mount plant as well as one in Clayton, NC, although the FDA has yet to post a closeout letter on its website. It is too late for the Clayton plant, which Hospira is closing. Of course these concerns will soon be Pfizer's to resolve. The pharma giant said in January that it would pay about $17 million to buy Hospira to expand its own generic and biosimilars offerings. Pfizer has inspected three of Hospira's plants, including the Vizag site, and indicated to investors that it is satisfied with Hospira's potential.

- here's the filing

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