The company saw an operating loss of $119m (€91m) for the quarter compared with income of $47m for the same three months of 2012. Revenue for Q1 also dropped 8.5% on last year to $884m.
Spokesman, Dan Rosenberg, told Outsourcing-Pharma.com the operating loss was due to “charges related to our new device strategy, along with the impact of costs associated with higher year-over-year manufacturing costs related to quality initiatives.”
Hospira has been working to improve quality for several years after warning letters from the US Food and Drug Administration (FDA). But, while some progress has been made – for example at the firm’s plant in Clayton, North Carolina – the 483s have kept on coming.
Most notable of the recent citations was the one Hospira received in March after the FDA visited to check on efforts to fix long-running problems at its facility in Rocky Mount, North Carolina.
On track
Despite the latest setback Hospira is confident it can address the manufacturing problems according to Rosenberg, who told us the March Rocky Mount 483 had not changed the “trajectory with regard to production and release levels.”
He added that the incremental increases in manufacturing since the company elected to extend already scheduled maintenance shutdowns of the plant were moving forward as previously stated.
The comments echoed those of Hospira CEO Michael Ball who said remediation efforts at the plant are “progressing very nicely” during the firm’s conference call last Wednesday.
Ball explained that: “A number of the [20] observations were related to remediation efforts already underway or issues that had been self-identified, which were slated to be addressed in the later part of the plant's remediation and modernization plan.”
He added that the company has, using a number of consultants across its facilities assured the FDA “everything that could be done is being done to keep this remediation on track while increasing supply to the market.”
Shortages
The impact of Hospira’s quality issues in North Carolina has not been limited to the firm’s financials. The various manufacturing interruptions have also restricted the supply of critical drugs, according to Rosenberg.
He said that while it is not “Hospira’s practice to identify which drugs we produce at which plants” but Rosenberg did admit “many of our drugs currently listed in shortage are produced today in Rocky Mount.”
Again, this echoed comments by Ball who told investors last week that: “The drug shortage issue is still very alive as alternative manufacturers of some drugs are “are now off market” and Hospira is “finding more and more demands… to get product out there into the market.”