Boehringer Ingelheim plant has become a money pit

Boehringer Ingelheim has invested more than $350 million in upgrades at its Ben Venue Laboratories plant in Bedford, OH, but it is still facing problems that could affect the sterility of injected drugs manufactured there. It reportedly had to stop production lines for ovarian cancer drug Doxil twice this year because of a leaky roof and mold issues. The German company has decided it is not worth continuing to pour money into the old facility and will shut it down instead, canning the 1,100 people who work there.

Given the age of the plant, the "magnitude of continued investment and time required to overcome the systemic manufacturing challenges is not viable," it said in a statement on the Ben Venue website. It said it had already spent $350 million on upgrades but projected $700 million in operating losses over the next 5 years to keep it open. It had previously said it would close the older parts of the facility, which is operated by its Ben Venue Laboratories unit, and lay off about 400 workers at the end of the year.

Ben Venue's statement claims that "interim controls implemented to assure product quality have been effective," but litigation between it and Johnson & Johnson ($JNJ) suggests otherwise. The plant is the sole supplier of the ovarian cancer drug Doxil, and J&J is trying to haul Boehringer Ingelheim before arbitrators over whether it has breached its contract. According to Bloomberg, J&J claimed in court filings that the plant has produced only 17 of 65 expected batches of the drug in 2012 and 2013 and now says it will be unable to complete orders because it has decided to shut the Bedford plant. It said the plant has had to halt production of the drug two times this year because of mold issues and because a roof was leaking. J&J says it is working to get a new supplier for the drug but that those contractors will be unable to make it through the FDA approval process before late 2014.

The FDA said today that a Doxil generic from Sun Pharmaceutical Industries is available and so it does not expect patients to be affected by Doxil shortages. "Ben Venue Laboratories informed FDA of its decision to close, and we are evaluating whether Ben Venue's closing will implicate any drug shortages," Steven Immergut, FDA assistant commissioner for media affairs, said in an email. He explained that the agency's drug shortage team is working through the government shutdown to prevent any shortages.

The FDA, in announcing a consent decree for the plant in January, said problems at the plant persisted. It pointed out that "recent FDA inspections found several product quality problems, including particles in some sterile products and basic facility cleaning and maintenance issues. Poorly maintained equipment deteriorated to the point that it shed particles into injectable drugs." The FDA said that the company's continued violations and its failures to promptly address problems put patients at risk. That said, the agency allowed the plant to continue to manufacture 100 drugs that are considered essential.

While the Ben Venue plant has been a key source of FDA issues for Boehringer Ingelheim, it is not the only one of the company's plants to run into compliance issues. In May, the FDA sent the German drugmaker an FDA warning letter, which took it to task for not investigating the source of large particles in batches of an active pharmaceutical ingredient manufactured at a plant at Ingelheim am Rhein in Germany, among other problems.

- here's the announcement
- here's the Bloomberg story