Medicines made by embattled drug manufacturer Leiner Health Products may soon return to store shelves as the company begins distributing over-the-counter drugs that have been held in limbo since a spring recall, the company said this week.
The U.S. Food and Drug Administration has cleared Leiner to distribute drugs manufactured before the recall, provided they pass quality tests being conducted by a third-party consultant, according to a document filed with the U.S. Securities and Exchange Commission. Drugs returned from store shelves during the recall will be destroyed, the company said.
"Our goal is to get back into the over-the-counter business," Leiner Chief Financial Officer Kevin McDonnell said Thursday. The company has reported losses since pulling all its over-the-counter drugs from store shelves in April.
Controversy has swirled around Leiner and its products since January when an employee inside the company's Fort Mill plant reported violations of good manufacturing practices to the FDA, including allegations that the company manipulated quality tests and falsified records, according to an affidavit filed in U.S. District Court. An FDA investigation followed, and Leiner shut down all over-the-counter drug manufacturing and distribution in March. In April, it recalled all of its over-the-counter products, and in June laid off 600 Fort Mill workers, changing the Fort Mill production facility into a distribution center.
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The FDA inspected the Fort Mill plant in January and February and issued a list of violations, including allowing drugs that failed quality tests to remain in the market, failing to properly train staff, not cleaning equipment properly and not identifying black specks found in some products, according to an FDA document.
Leiner is one of the leading makers of store-brand painkillers, allergy medicines and laxatives for Wal-Mart, Costco, CVS and others. The drugs account for about 30 percent of the company's total business, while generic vitamins comprise the rest. Both were made at the Fort Mill site. The vitamins were not affected by the recall.
An 'important step'
McDonnell said the drugs scheduled to be distributed were made before the FDA inspections and ensuing recall but had been verified for quality according to FDA methods by a third party.
"This was an important step to demonstrate to the FDA that the products we manufactured were acceptable to be released into the market," McDonnell said.
Distribution will begin by the end of the year, but McDonnell could not provide an exact timeline of when the drugs will reach store shelves. He also would not elaborate on how the recall has affected Leiner's relationship with customers or which stores will receive the drugs.
Officials at Wal-Mart and CVS, two large customers, could not be reached for comment Thursday.
When asked if the drugs in question were manufactured in Fort Mill, McDonnell responded by saying all the company's drugs had been checked for quality regardless of where they were produced.
Leiner CEO Bob Kaminski this summer said the company had identified the individuals in Fort Mill responsible for the violations and relieved them of their duties.
The company declined to comment on details of the FDA investigation.