Gutted J&J consumer healthcare plant another year from reopening

Johnson & Johnson ($JNJ) will continue to ramp up its supply of over-the-counter drugs this year but it will be another year before its key manufacturing facility in Fort Washington, PA, will reopen.

Chairman and CEO William Weldon, in a conference call with investors last week, said its McNeil Consumer Healthcare company expects to open the "state-of-the-art" plant in 2013.

The facility was immediately closed after the April 30, 2010, recall of more than 136 million children's and infants' products in the largest recall of children's medication in history, according to an article on Montgomerynews.com. It was one in a string of recalls tied to the facility. Just last August the company yanked another 2.5 million units of Tylenol. 

McNeil entered into a consent decree with the FDA in March 2011 covering plants in Lancaster, PA, and Las Piedras, Puerto Rico, in addition to the Fort Washington facility. In April 2011, Weldon said the plant was being gutted and the company would invest more than $100 million for its renovation.

In his call, Weldon said supply issues and remediation expenses had nicked 2011 operating sales 0.7%. In the three years prior to the closing, the plant generated average annual revenues of $650 million.

He told investors in the call that all commitments to date under the consent decree had been met and that Tylenol Severe Cold caplets and certain children's and infants' Tylenol products, have been reintroduced to the market.

The McNeil product recalls brought to light shortcomings of the company's plant recovery and supply chain process. Weldon said in the calls that Johnson & Johnson was making good strides in revamping its manufacturing and quality processes "with our goal of significantly reducing the number of suppliers and external manufacturers while improving quality."

"Our efforts in this area are already paying off with better inspection records despite an increase in regulatory activity," he said.

- listen to the conference call
- here's the Montgomerynews.com story

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