In the last few years, there seems to have been an epidemic of once revered companies suddenly unable to perform the most basic functions necessary for their businesses. Finance firms ran out of money and ended up bailed out or bankrupt. An automobile firm produced cars that seemed to accelerate out of control. Another automobile company, once the world's biggest, went bankrupt and had to be bailed out by the government. An oil company took months to cap a blown out well.
In the health care world, drug companies which could no longer manufacture pure and unadulterated drugs. Baxter International sold deadly contaminated heparin (post here). Johnson and Johnson sold contaminated or wrongly dosed over-the counter childrens' medicines (post here).
Another Troubled Johnson and Johnson Factory
Now yet more problems have surfaced at a Johnson and Johnson factory. As reported by the AP:
A dozen recent federal inspections of a Johnson & Johnson factory for heartburn and other nonprescription medicines show a host of violations that could affect the quality and makeup of the drugs.
A new report on inspections at the Lancaster, Pa., factory in the past month indicates a pattern of ignoring rules for manufacturing and quality, failure to investigate problems that could affect the composition of products, carelessness in cleaning and maintaining equipment, and shoddy record-keeping.
In some cases, medicine batches made during equipment failures were not checked for quality.
Food and Drug Administration investigators had to ask for information many times in some cases, and then wait days to get it.
The scope of the problems was large:
The inspection report, released Wednesday, lists 12 different types of violations, from not determining the impact of equipment failures 'on the manufacturing process and products' to incomplete records of investigations into 'unexplained discrepancies' in manufacturing. The latter problem occurs 'whether or not the batch has already been distributed,' the report states.
Some examples were:
_'Laboratory controls do not include the establishment of scientifically sound and appropriate test procedures to assure that drug products conform to appropriate standards of identity, strength, quality and purity.'
_Procedures to prevent 'objectionable microorganisms' from getting into medicines appear not to have been followed.
_'Deviations from written test procedures are not justified.'
_Staff were not following up 'to determine the causes for repeated mix-up of tablets.'
_Written procedures for cleaning and maintenance did not have enough detail about the methods, equipment and materials to be used.
_The plant did not have recent drug production and quality control records readily available to the inspectors, as is required.
_Samples of drug products taken to determine if they met written specifications were not properly identified.
_There was no preventive maintenance program for at least five types of complex manufacturing or testing equipment.
Previous Problems at Johnson and Johnson Factories
Note that just a few days before this hit the news, the Philadelphia Inquirer reported this follow-up from the problems at the plant in Fort Washington, PA run by Johnson and Johnson's subsidiary McNeil Consumer Healthcare
A federal grand jury is investigating problems at the now-shuttered McNeil Consumer Healthcare plant in Fort Washington that triggered the recall of children's Tylenol and other popular pediatric medicines, according to the company.
The existence of the investigation was made public Tuesday by Louise Mehrotra, vice president for investor relations for Johnson & Johnson, McNeil's parent company.
That report reminded us that there have been problems at a third Johnson and Johnson plant:
[Johnson and Johnson subsidiary] McNeil is now dealing with FDA issues at three drug-making facilities, including one in Las Piedras, Puerto Rico.
Problems at the Las Piedras plant last year set in motion the investigation at Fort Washington.
At Las Piedras, FDA inspectors were chiefly concerned about why it took McNeil more than a year to respond to consumer complaints of a musty smell associated with Tylenol caplets produced at the plant. The smell was traced to a chemical used to treat wooden pallets at the plant.
So three Johnson and Johnson manufacturing plants have recently allegedly failed to uphold basic quality standards, and thus have made medicines that ranged from musty smelling to contaminated. Clearly, the most basic responsibility of a drug manufacturer is to supply fresh, pure, unadulterated drugs, and now Johnson and Johnson, a once iconic American drug and device company, seems to be having trouble fulfilling this responsibility.
Caused by Leadership Shortcomings?
It seems that health care firms, like so many others, have been distracted by financing fantasies and marketing marvels from the most fundamental parts of their business. One wonders how responsible are leaders with little understanding of the fundamentals of the fields in which their firms operate, and who seem to just get richer no badly how their firms perform.
Note that the current Johnson and Johnson CEO William C Weldon's background is in "sales,marketing and international management," not manufacturing, engineering, chemistry, or the biological sciences, per the company's 2010 proxy statement. In 2009, with one factory already under investigation, his total compensation was over $30,000,000.
The Johnson and Johnson board of directors all get more than $200,000 per year in compensation. The board does include two biologists and two physicians (Prof Mary Sue Coleman, is "professor of biological chemistry" at the University of Michigan; Michael M E Johns, MD, a physician; Susan L Lindquist, Professor of Biology at Massachusetts Institute of Technology; and David Satcher, MD a physician.) However, while it also contains the retired CEOs of a telecommunications company, an electronics company, an airline, a food company, and an bank/ finance company, it does not seem to contain anyone with experience in manufacturing, much less pharmaceutical manufacturing.
On the other hand, it includes several people with leadership positions in non-profit health care institutions with whose primary responsibilities their Johnson and Johnson board membership may conflict. (Mary Sue Coleman is President of the University of Michigan; Michael M E Johns, Chancellor of Emory University, member of the Institute of Medicine, member of the editorial board of JAMA, and chair of the publications committee of Academic Medicine; Susan L Lindquist, member of the Institute of Medicine; Leo F Mullin, Chairman of the Board of the Juvenile Diabetes Research Foundation; William D Perez, Trustee of Cornell University, and Trustee of Northwestern Memorial Hospital; and David Satcher, board member for the Kaiser Family Foundation.)
Note that leaders of non-profit academic health care institutions who also serve on boards of for-profit health care corporations often justify the apparent conflict by the need to "have a voice and interact with the business world," as explained (see post here) by a spokesperson for Mary Sue Coleman. A university president who sits on a corporate board to "understand what the commercial world is doing," may have not learned enough about that world to make sure it is doing it well.
Finally, several Johnson and Johnson board members are former or current leaders of some of the financial firms whose problems lead to the global financial meltdown, or "great recession," (Anne M Mulcahy has been a member of the Citigroup board since 2004, and was on the FNMA board from 2000 to 2004, both nearly failed, and required government bailouts to survive; Leo F Mullin, currently Senior Advisor to Goldman Sachs Capital Partners, a subsidiary of Goldman Sachs, which just settled charges by the SEC that it misled investors; and Charles Prince, CEO of Citigroup from 2003 to 2007.) Are these the sort of people we should trust to uphold the fundamental quality of drug manufacturing?
Health care organizations are increasingly saddled with leaders who do not understand the fundamentals of the health care environment, are not pledged to support their missions, and may be distracted by conflicts of interest. Such leaders may be increasingly responsible for the dysfunction of modern health care. True health care reform requires leadership that understands the context, and supports the mission without conflict.