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Genzyme pays regulators $175m

Genzyme has agreed to pay $175m to federal regulators in connection with manufacturing problems at its Allston Landing facility in Boston, US

Genzyme has agreed to pay $175m to federal regulators in connection with long-standing manufacturing problems at its Allston Landing facility in Boston, US.

The payment is the return of 'unlawful profits' from the sale of products made at the plant, the US Food and Drug Administration (FDA) said in a statement.

As part of the agreement, Genzyme must transfer the fill/finish process for drugs manufactured at its Allston plant to other manufacturing sites within specified deadlines, or face losing 18.5 per cent of revenue received from selling products made there.

Additionally, if Genzyme fails to comply with manufacturing standards over the next few years, it will have to pay £15,000 per day until it meets federal standards.

The remediation process is expected to take between two and three years to compete. Upon completion, the FDA will require five years of oversight and annual reports submitted by a third-party contractor.

FDA principal deputy commissioner Joshua Sharfstein said: "It is critical for the safety of the drug supply that companies comply with basic manufacturing standards. The FDA takes these obligations very seriously and expects manufacturers to do the same."

The long-standing manufacturing problems have already cost Genzyme millions. In June, the plant was shut down for three months to clean up a viral contamination. Although the virus was not harmful, the shutdown was costly. During the fourth quarter, profits plunged 73 per cent to £23.2m on lower sales.

25th May 2010

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