Maryland Federal Grand Jury Investigating Lilly
Feb. 19, 1993
INDIANAPOLIS (AP) _ Eli Lilly and Co. said Friday it is the target of a federal grand jury investigation into its compliance with government rules covering the company's drug manufacturing operations.
The inquiry centers on an agreement Lilly made in 1989 with the U.S. Food and Drug Administration to improve quality control systems, the company said in a statement. That agreement came after the FDA issued a highly critical report on manufacturing at the company's Indianapolis plant.
''We believe that we have complied with the terms of the voluntary agreement and that our manufacturing quality systems are now among the best in the industry,'' said Robert H. Williams, vice president of corporate quality and environmental affairs.
Lilly said the government hasn't questioned the safety or effectiveness of any of its drugs. The company said it is cooperating fully with the investigation by a grand jury in Maryland, where the FDA is located.
Lilly's stock price closed down $3.125 to $48.75 in trading Friday on the New York Stock Exchange.
In recent months, Lilly has been forced to halt production and distribution of products made by a subsidiary of its medical products division.
This month, the company reported flat earnings of $311.2 million in the fourth quarter, largely because of a write-off of $46 million, including the value of stock it holds in Centocor, a Malvern, Pa. drug maker.
In Janurary, Centocor said it had halted clinical trials of Centoxin, an anti-infective drug, after possible links to patient deaths.
In 1989, after a four-month investigation, the FDA issued a 90-page report detailing a variety of problems related to Lilly's manufacturing processes, documentation and quality control procedures.
The FDA said there were objectionable conditions at Lilly's Indianapolis capsule and tablet plant, including failure to have written standard operating procedures for many tasks and record-keeping problems.
''In nearly every system examined, the available data were found to be incomplete or inaccurately summarized,'' the FDA said at the time.
The investigation had been launched after Lilly recalled a thyroid product and vitamins. Both were recalled because of questions about their potency, not safety, officials said.
After the FDA report, Lilly voluntarily recalled batches of 10 drugs and, for a time, halted distribution of products from the plant.
Among the medicines recalled were Darvon, a pain reliever; Tapazole, a thyroid medication; Aventyl, an antidepressant; and Nalfon, an anti- inflammation drug.
Lilly also formed a task force to correct the errors discovered by the FDA.
The following April, Lilly discontinued manufacturing 60 products and versions of products, several of which were among those cited in the FDA inspection report. Included were some dosages of Darvon and some packaging formats of Axid, an anti-ulcer drug, and of Keflex, an antibiotic.
U.S. Attorney Richard Bennett in Maryland declined to comment on the new inquiry. Ken Shelin, director of investigations with FDA's Detroit district, said he could not confirm any probe because grand jury investigations are confidential.
Fritz Frommeyer, a spokesman for Lilly, also declined to comment beyond the company's written statement.