Able Laboratories Files for Chapter 11 Bankruptcy as Recalls, Layoffs, and Investigations Take Their TollJul 20, 2005 | www.newsinferno.com
Over the past 14 years, Able has had many problems with the FDA including: over 10 drug recalls; charges of selling medications which were either adulterated, mislabeled, or with incorrect potency; failure to report serious adverse reactions with respect to at least five drugs; improper extension of drug expiration dates without proof the drugs would still be effective; and selling drugs with the wrong package insert.
Able had received a number of FDA warnings with respect to similar deficiencies and, thus, it was unclear what measures the agency would impose with respect to the company’s latest deviations from proper manufacturing practices.
A full list of the recalled products, with identifying tablet imprint codes or liquid formulation lot numbers, was posted at: http://www.fda.gov/oc/po/firmrecalls/qualitycare06_05.html. Additional information concerning Able Laboratories can be obtained by calling 1-888-463-6322.
Although the FDA later attempted to justify the one week delay (May 27) in advising the public of the massive drug recall as reasonable under the circumstances, many experts as well as consumer groups found the excuses to be unacceptable.
Dr. Sidney M. Wolfe of Public Citizen found the delay to be particularly troubling in light of the fact that the massive recall was based on what the FDA itself stated were “serious concerns that they (all of Able’s products) were not produced according to quality assurance standards.”
The FDA took the position that the additional time was needed to coordinate the voluntary recall with Able Labs and to prepare and publish a complete listing of the recalled drugs on the agency’s website at http://www.fda.gov/bbs/topics/NEWS/2005/NEW01182.html.
In a related recall, the FDA and Quality Care Products LLC, a federally licensed drug repackaging company, notified consumers and healthcare professionals by letter of a recall of all repackaged Able drug products.
As truckloads of recalled drugs were brought back to the company, Able saw its stock drop 86% in value since mid-May. Additional layoffs were announced on June 9 cutting its workforce by over 50%. Its profits for the first quarter of 2005 had been up 25%. Able made no prediction as to when, or even if, production would resume.
All of this highly unusual activity also raised serious questions as to the FDA’s enforcement procedures since Able had passed 11 plant inspections in the past 3 years without the FDA mentioning any serious concern about the company’s manufacturing practices and new-product approvals.
The FDA had also approved Able’s applications to make 25 new generic drugs since 2001.
During May, June, and the beginning of July, neither Able nor the FDA clarified the situation, yet both advised patients to keep taking their medications until getting new ones from their doctors since abruptly stopping many drugs can be more harmful than taking the ones that were recalled.
Of course, that raised the question of what was really wrong (or thought to be wrong) with the entire product line that was pulled from the market?
Apparently, the drugs were not suspected of being so compromised as to make taking them a life-threatening risk. Yet, only something very serious could have prompted the unprecedented recall of an entire product line and suspension of all manufacturing.
Then, in a scathing 15-page report to Able Laboratories dated July 6, 2005 and posted on the company’s website (http://www.ablelabs.com/FDA/483.pdf), the FDA revealed that its drastic enforcement action was the result of agency inspectors having found massive record falsification and mismanagement by Able in order to elude FDA detection of several defective medications.
Among the many violations, deficiencies, and deviations, FDA inspectors found the following:
• Alteration of test data to hide the fact that tens of thousands of tablets and capsules did not meet federal standards.
• Technicians and supervisors engaged in the falsification of this data.
• Able had engaged in this cover-up of deficiencies since at least 2002 by various means including “cutting and pasting” computer files, changing sample weights, changing processing methods, and substituting sample vials in order to do away with evidence of sub- or super-potent medications.
• Able’s quality-control unit “lacks authority to fully investigate errors that have occurred” including “erroneous data” such as false printouts from chemical analysis equipment that were then filed in the company’s annual reports and New Drug Applications. (These alterations, when done electronically on a new computer system that replaced one using paper log books and receipts, leave no evidence of the changes for the FDA inspectors to find.)
Able’s interim CEO, Robert Mauro, resigned on July 7.
The type of conduct Able now stands accused of has prompted both a civil and criminal investigation by the FDA and the United States Attorney’s Office in Newark, New Jersey.
Clearly, the potential for serious penalties and fines as well as criminal charges is very real.
One question that remains unanswered is; Why did the FDA not conduct a much more extensive inspection in 2004 after it was discovered that Able had failed to report 27 adverse reaction complaints with respect to a number of the company’s medications?
A warning letter was the extent of the FDA action when, clearly, quality control issues were there to be seen.
In an effort to survive as a viable company, Able responded to the FDA charges in a letter dated July 8 and posted on Able’s website (http://www.ablelabs.com/FDA/FDA483_Response.pdf).
The company basically threw itself on the mercy of the FDA by stating it was willing to enter into a consent decree which would put Able under increased FDA oversight and supervision by the federal District Court. An earlier consent decree against Able had been in effect from 1992 to 2002.
Able’s plans to open a new plant in Cranbury, New Jersey, that would triple its output capacity, would seem to be all but dead at this time.
Able also stated that it is prepared to enter into negotiations with FDA officials immediately.