FDA Issued Warning To Hospira, Inc. (HSP) Which Is Soon To Be Part Of Pfizer Inc. (PFE)

Hospira, Inc. (NYSE:HSP) received a FDA warning about various violations at its Italian plant. The warning letter came in March, after Hospira agreed to be acquired by Pfizer Inc. (NYSE:PFE). The company’s executives said that they had considered FDA concerns before agreeing to be part of Pfizer in a $15 billion transaction.

The FDA has, in the past, raised plant quality concerns about Hospira, Inc. (NYSE:HSP)’s facilities in the U.S. and abroad. Currently, things appear stalled at the plant in India where the FDA has also claimed various violations of drug production practices. The regulator singled out Hospira’s Liscate facility in Italy in its latest warning letter to the company, a move that could complicate matters for Hospira and Pfizer in their proposed marriage.

Problem cited by FDA

The FDA cites, in the March 31 warning letter, that Hospira didn’t adequately investigate customer complaints about product discoloration. The complaints were received from 103 customers over a period of two years. Although the company did look into the matters raised by the customers, the FDA noted that the investigation was shortsighted at best. It seems that the problems were caused by faulty manufacturing that Hospira didn’t detect in its investigations.

Additionally, the FDA also raised issues about a product contamination threat at the Liscate plant. The other issue that didn’t impress the FDA was that Hospira employees were deleting, or even overwriting, some computerized test results, a practice that the regulator strongly discourages.

Hospira ready to comply

According to Hospira, Inc. (NYSE:HSP), the company has been able to complete several corrective measures that they committed, according to the FDA, in response to the earlier letter back in May 2014. In the latest case, the company is evaluating the issues raised so that it can take the appropriate corrective actions.

Problem after problem

Hospira has been hit with several warning letters about the quality of its manufacturing plants. The company has also been adversely impacted through loss of sales due to plant disruption and heavy investment to correct the problem areas in its manufacturing system.

Hospira, Inc. (NYSE:HSP)’s plant in India has been unable to kick into operation because of similar quality concerns. The company had placed its hopes on the Visakhapatna because of its ability to help Hospira lower its operating expenses.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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