Schering GMPs: Over 25% Of Consent Decree Steps Complete, Company Says

Schering-Plough is over a quarter of the way through fulfilling its requirements under a 2002 consent decree.

"The company has completed 64 of the 222 Significant Steps included in its cGMP Workplan, and 11 Process Validation Certifications have been provided to FDA," an Oct. 9 filing with the Securities & Exchange Commission states.

In addition, Schering "has accomplished hundreds of milestones, supporting both the Significant Steps and Process Validations, as well as supporting future Significant Steps and Process Validation studies."

The good manufacturing practices workplan and revalidation plans are expected to be completed by Dec. 31, 2005.

Schering acknowledges that "significant work remains to be done," and claims it remains "committed to rebuilding its relationship and reputation with FDA, ensuring a culture of cGMP compliance...and further developing core competencies in its technical and quality operations."

Schering is in the middle of an FDA good manufacturing practices consent decree signed by former CEO Richard Kogan in May 2002 and scheduled to be complete by 2006.

The firm agreed to update its facilities to comply with GMP regs and pay a record $500 mil. fine in connection with GMP violations at facilities in New Jersey and Puerto Rico (¹ (Also see "Schering Rebetol Is Only “Medically Necessary” Oral Product In FDA Decree" - Pink Sheet, 27 May, 2002.), p. 13). The firm received word Oct. 1 that the U.S. Attorney's Office in New Jersey had closed a criminal investigation of a Puerto Rico facility.

The consent decree requires collaborative work in four major areas: management controls, operational controls, a validation certification plan (VCP), and a cGMP Workplan.

Additionally, a Quality System Improvement Process, including Quality Management Systems, is "expected to be deployed to the consent decree sites" by the end of the year.

"We expect that the implementation of Quality Management Systems designed to maintain sustainable cGMP compliance will result in more streamlined and efficient operations," the filing states.

Nevertheless, Schering says that its compliance initiatives are no guarantee that GMP violations will not occur in the future. "No organization can be failsafe," the company maintains in the filing. "The key to reducing the chances for such issues lies in building a culture of business integrity."

Schering announced a cut in its dividend payments Aug. 21 due to the ongoing impact of the FDA consent agreement and the likelihood for upcoming settlements with other government agencies (² , p. 14). The company protected sales and manufacturing from its cost-cutting measures (³ (Also see "Schering Spares Sales, Manufacturing From Cost-Cutting" - Pink Sheet, 25 Aug, 2003.), p. 15).

CEO Fred Hassan pledged a more open communications strategy and recruitment of a new management team when he joined Schering in April (⁴ , p. 19).

As part of Hassan's efforts, Brent Saunders has been named to the newly created position of senior VP-global compliance & business practices, effective Nov. 1. Saunders will report to Hassan.

Saunders joins from PricewaterhouseCoopers where he was director of business advisory services. Previously, he was chief compliance officer for Coventry Health Care and Thomas Jefferson University & Health System. He is also a co-founder of the Health Care Compliance Association.

Saunders will oversee "development of global standards, training and enforcement programs for compliance in all areas of the company, including manufacturing, R&D, clinical trials and sales & marketing," Schering said.

He will also be responsible for establishing privacy policies for customers, patients and employees.

Saunders holds a law degree from Temple University School of Law, an MBA from the Temple University School of Business and Management, and a BA in economics from the University of Pittsburgh.