The latest in a series of recalls for Actavis' Little Falls, N.J. facility comes at an awkward time for the generics industry and FDA, and could fuel a congressional push towards tighter oversight of pharmaceutical production.

Actavis said Aug. 1 that it is recalling all 65 products manufactured at the plant following an inspection that "revealed operations which did not meet the FDA's or Actavis' standards for good manufacturing practices."

The announcement follows news that the Department of Justice has been investigating the integrity of Ranbaxy's ANDAs (¹ Also see "Ranbaxy’s Ripples: Generic Drug Integrity Returns As Focus For Congress, FDA" - Pink Sheet, 21 July, 2008., p. 9).

And while Actavis' problems do not involve accusations of deliberate fraud, its flawed manufacturing operation is another piece of evidence for those who argue that industry needs more oversight.

The House Energy and Commerce Committee recently began an inquiry into why FDA did not act to remove Ranbaxy products from the market after it uncovered GMP violations at a plant in India in 2006 (² Also see "FDA Should Recall Drugs Subject To GMP Violations, Rep. Dingell Suggests" - Pink Sheet, 28 July, 2008., p. 27). The latest Actavis recalls could become part of a broader inquiry.

Reps. John Dingell, chairman of the committee, and fellow Michigan Democrat Bart Stupak, chairman of the Subcommittee on Oversight and Investigations, have also hammered FDA over its failure to prevent problems with Baxter's heparin.

With heparin, the problem was that FDA didn't see the problems (in part because a bureaucratic glitch caused the agency to inspect the wrong plant). In the case of Ranbaxy and Actavis, the agency was well aware of the manufacturing trouble, but the concern is how much time FDA gave the firms to fix the problems instead of pulling the products.

FDA is quite familiar with the location of the Totowa facility. The agency sent Actavis two warning letters over the past two years and has conducted at least three inspections (see chart: " ³ A Track Record Of Trouble: Actavis Plant Has History Of Violations ").

If congressional pressure were to prompt the agency to enter a new enforcement era with essentially a zero-tolerance policy, the number of official inspections the agency carries out might actually become less relevant, since a single visit could prove disastrous if any violations are found.

Consultants and the agency have often implored firms to take notices of violations extremely seriously, lest they fester and result in a burdensome consent decree, but a policy of immediate recall following a violation could also make industry obsess about GMP because of the large financial impact recalls can have.

A Global Story

For now, Dingell and Stupak are focusing on drafting legislation that would boost FDA's overseas inspections. But if their pressure on FDA results in administrative changes so that the agency offers less leniency to firms that are found to have problems, that change could have as much impact or more on industry's operations.

Actavis' recent commercial activities can be seen as a microcosm of the globalization that has swept the pharmaceutical industry in the last few years and the integration challenges it has produced.

In 2005 Actavis became one of the top five generic companies in the world, via the acquisition of Amide in the U.S., the generics division of Norwegian Alpharma, the purchase of Lotus Laboratories and a collaboration with Emcure in India, Pharma Avalanche in the Czech Republic and Slovakia, Higia in Bulgaria and Keri Pharma in Hungary.

Actavis continued its tromp across the globe in 2006 and 2007, picking up Sindan in Romania, ZiO Zdorovje in Russia, Abrika in the U.S. and two manufacturing plants and an API center in India. Actavis acquired Zhejiang Chiral Medicines Chemicals Company in China and a manufacturing site in Nerviano, Italy, in 2008.

The Little Falls plant itself came to Actavis as part of the buying spree; it was added though an acquisition in 2005.

As the firm enters a new stage of growth it will have a new CEO. Robert Wessman was replaced by Sigurdur Oli Olafsson as CEO of Actavis Group on Aug. 5 (see chart: " ⁴ Actavis Gets New CEO As Growth Strategy Shifts To Targeted Buys ").

Fallout From Little Falls

One of Olafsson's challenges will be to handle the fallout from the full plant recall. The firm had been planning to shutter the facility and move production to the nearby Riverview Drive plant by 2009, but the recall may prompt the firm to accelerate its decision making.

Although Actavis issued a Class I recall for Digitek (digoxin) earlier this year, the firm noted that the most recent recall was "not prompted by product complaints or health hazards associated with the products."

Actavis manufacturing problems have already produced commercial and liability problems for the firm.

In a class-action suit filed on behalf of plaintiffs who consumed the recalled Digitek, lawyers note in a June 3 filing that the firm did not generally disclose which lots of the product were affected by the recall.

Actavis has "never notified the general public, the Class or the medical community that the relevant time period is between March 2006 and April 2008, or about the NDC numbers," the filing states. "This is only provided by Defendants to persons who contact them and are sent a Digitek Consumer Return Kit."

The return kit, which the plaintiffs note is a non-HIPAA (Health Insurance Portability and Accountability Act) compliant authorization for pharmacies to process refund requests, lists six NDC numbers.

Yet according to a July 14 amicus brief filed by Department of Justice attorneys, the firm's recall covered all lots.

Actavis rejects the charges, saying failure-to-warn and design-defect claims are pre-empted by FDA approval.

In June, Actavis initiated a retail-level recall of Uristat, an over-the-counter urinary tract infection medication, after developer Johnson & Johnson found manufacturing problems at the facility. J&J's McNeil division subsequently dropped Actavis as its manufacturer and has not been able to return the drug to market.

A Corrective Action Plan Two Years In The Making

The most recent recall was "a part of the corrective actions growing out of the inspection that instigated the previous recalls," Actavis' VP and chief legal officer John LaRocca said. "This recall is being undertaken based on our assessment of the manufacturing and documentation practices of the Little Falls facility and is not based on safety or health related observations or issues."

Products manufactured at the Little Falls facility including a number of Schedule II controlled substances such as oxycodone, meperidine, hydromorphone and hydrocodone.

The recall is at the retail level only, according to a company press release, following receipt of a 483 form after a May 20 inspection. Patients "should continue to take [their medication] in accordance with their prescriptions," the firm says.

LaRocca said Actavis "has been undertaking corrective actions with the intent of improving the practices of the facility's operations. These plans will also evolve into a forward-looking corrective action plan, which will be part of our ongoing discussions with the FDA."

How To Engage With Firms

Actavis' discussions with FDA have been ongoing for a number of years, and the agency's decision to engage with the firm, rather than immediately request a recall, could raise congressional eyebrows about the case.

As part of the numerous inspections and citations, FDA questioned whether Actavis identified underlying systemic problems and why the firm allowed production to continue in an Aug. 15, 2006 warning letter.

"The specific violations noted in this letter are serious and may be symptomatic of underlying problems," the agency wrote. "Several of the observed deficiencies were long-standing, and there is no indication of how or why the lack of compliance was not identified by your firm, and why it was allowed to continue for such an extended period of time."

FDA added, "Does your firm have any insight into this situation?"

That engagement strategy does not appear to have produced a lot of insight by the company into the problems. Even without congressional pressure or policy changes, though, the public announcements of recalls themselves could force industry to emphasize manufacturing quality.

Thomas Lamb, a Wilmington, N.C.-based lawyer who publishes a Web site dedicated to drug injury cases, said the number of cases popping up leads to questions about FDA's ability to enforce compliance.

"It just seems somewhat remarkable that with ... all this coming to light at the same time, you kind of wonder what's been going on at these generic manufacturing facilities, and how much attention has been paid or how much enforcement there's been by FDA."

- Becky Jungbauer (r.jungbauer@elsevier.com)

GMP Storm Cloud: Generic Firms May Get Further Scrutiny After Actavis Recall

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