More negligence uncovered in pharmaceutical industry
by Bob Briton New scandals are rocking the pharmaceuticals industry in Australia. With the future of suspended complementary medicines manufacturer Pan Pharmaceuticals still hanging in the balance, reports of other serious violations of manufacturing standards keep rolling in. Last week the Therapeutic Goods Authority (TGA) moved to shut down Australian Pharmaceutical Industries (API), the nation's second biggest drug company and parent company of Soul Pattinson Manufacturing and the Soul Pattinson and Chemworld pharmacy chains. This was followed up with the announcement that Cottee Health PharmAction, producers of more than 450 prescription drugs and over-the-counter pharmaceuticals, had gone into voluntary administration. Inability to raise the capital necessary to ensure quality control was said to be behind this major company's difficulties. Elsewhere, the TGA was holding talks with Brisbane-based drug manufacturer New Products Development about the need to rectify resources, training and systems after a recent audit by the regulator. TGA spokeswoman Kay McNiece told the media ". it is fairly common to have lots of things that need to be fixed up. Invariably there are things that need to be rectified." Ms McNiece said a mouthful! The audits that led to the closing down of API discovered an open drain of liquid effluent, cockroaches, rotting wooden floors and unacceptable levels of bacteria on equipment at the Kingsgrove factory, which was described as "very run down". Paint flaking off the ceiling, holes and crevices in walls and floors, chipped and flaking paint on machinery and seriously damaged walls were also among the potential hazards. However, as API managing director David Young points out, the decision to close the factory before the TGA did it for him was taken because of an inability to overcome problems with the identification, documentation and validation of products containing promethazine hydrochloride. Errors in the use-by date of this ingredient mean that the products, while considered safe for consumption, will lose their medicinal potency before their expiry date. Seven cough and allergy medicines have been recalled as a result. [See box for names of recalled medicines] Mr Young sought to excuse the failings of his company, saying that for the past two years the management had been preoccupied with finding new premises for the manufacturer's operations. He is confident that the company will bounce back in spite of reports that Fred Bart, the entrepreneur behind an attempt to buy out the failed Pan Pharmaceuticals concern, has shown interest in API's predicament. In the case of Cottee Health PharmAction, a scramble to meet the demand left by the collapse of Pan Pharmaceuticals had supposedly caused the drug maker to run ahead of its quality control procedures. The inability to raise the $2 million required for an upgrade and the loss of a contract accounting for 40 per cent of Cottee's business were cited as the reasons for the company's woes. However, The Australian Financial Review reported last week that Cottee Health PharmAction staff had been told by the TGA that they had concerns about their employer's air-conditioning and their ability to meet certain rules for "good manufacturing practice". Penalties for such violations have been stiffened considerably in the wake of the Pan disaster. Penalties for malpractice now include fines of up to $1.1 million and five years jail. Should investigations into API uncover sufficient evidence, the company faces a $550,000 fine while individuals found in breach could incur a $110,000 fine and/or 12 months imprisonment. The Federal Government is said to be considering on-the-spot fines for breaches and a system of releasing information to the public about the safety and efficacy of medicines. Some commentators, including Martyn Goddard of the Australian Consumers Association are encouraged by these developments. Commenting on the "voluntary" suspension of API's manufacturing licence, he is reported as saying: "The TGA's reaction in this case shows that it has really listened to the criticism it copped after Pan and it has done something about it. We call on the parliamentary [health] secretary Trish Worth to continue to strongly support this new but controversial toughness from the TGA." Mr Goddard's comments raise a lot of questions. What was the TGA doing prior to the Pan scandal while all these cases of negligence were banking up? TGA technical director John McEwen was quoted last week defending the agency's track record. "There was a criticism that people knew that we were coming and could cover things up and put certain things away. That is a lesson learnt — that unannounced audits are appropriate ON OCCASION." It is hard to imagine that the many problems at the API factory that were described in great detail in the media last week could simply be swept under the carpet. That factory was supposedly audited in December last year and before that in August 2001. The TGA claims that it audits 250 of the 335 medicine-producing plants in the country each year. If that is so, to what should we attribute the sudden rise in the number of violations of acceptable standards that we have witnessed in recent months? Clearly, the TGA has a lot of explaining to do. It is unlikely, however, that the explanation would effectively counter the logic of the case for putting the pharmaceuticals industry under public ownership and control. API managing director David Young was speaking recently about the mood at a meeting of his company's shareholders in Sydney following the developments of last week: "I think they should be disappointed, we're disappointed, I wouldn't expect shareholders not to be. Our job's to look after the shareholders' interests and we believe as a board we've made the best decision to ensure that we do that for the long term." It's way past time that the interests of the public for safe and effective medicines were made the top priority of the pharmaceuticals industry and not the need to boost profits and returns to shareholders.