Johnson & Johnson's McNeil Consumer Healthcare May Shutter 800 Employee Plant

Published: Nov 06, 2014

Johnson & Johnson's McNeil Consumer Healthcare May Shutter 800 Employee Plant

November 3, 2014

By Mark Terry, Breaking News Staff

According to Caribbean Business last week, McNeil Consumer Healthcare is preparing to close its facility in Las Piedras, Puerto Rico in December. The manufacturing plant employs approximately 800 people and makes Extra Strength Tylenol and regular Tylenol.

The facility has had a problematic history. In 2011, McNeil, a division of Johnson & Johnson , agreed to put the Las Piedras facility, and two others, under the supervision of the U.S. Food and Drug Administration after numerous drug recalls and an FDA safety investigation. The other facilities were located in Fort Washington, Pa., and Lancaster, Pa.

Inspections of the facilities from 2009 to 2011 found numerous violations of the Federal Food, Drug and Cosmetic Act. Those deficiencies led to several recalls, including a recall in April 30, 2010 of children’s Tylenol, Motrin, Zyrtec and Benadryl products.

“The decree, filed by the U.S. Department of Justice’s Office of Consumer Litigation and the U.S. Attorney’s Office for the Eastern District of Pennsylvania, requires McNeil to destroy all drugs under McNeil’s control that have been recalled from the Fort Washington, Las Piedras and Lancaster facilities since December 2009,” wrote a new release by the FDA in March 2011. “McNeil also must retain an independent expert to inspect the Fort Washington, Las Piedras and Lancaster facilities to determine whether the violations have been corrected, and to ensure that adequate manufacturing processes are in place. After expert certification, the FDA will determine if the facilities are in compliance.”

In 2012 the Las Piedras plant laid off 225 people as it dealt with the FDA deficiencies. At that time, the facility employed about 1,100 people.

It is not completely clear if the current closing is due to difficulties complying with the FDA requirements, or if it was in response to a 4 percent excise tax (Law 154) that offshore corporations receive starting in 2010. Other sources suggest the closing is likely connected to the tax and the high cost of electricity in Puerto Rico.

“They are already moving the production of Tylenol to other facilities because things didn’t work out as they thought,” said Caribbean Business’s unnamed source. “This closure means not only the loss of direct jobs, but also about 1,500 indirect jobs and a severe blow to Las Piedras community.”

McNeil has increased production capacity at its facility in Guelph, Ontario. In operation for 30 years, this plant makes Tylenol, Benadryl, Imodium and Sudafed. It has been undergoing a multimillion-dollar expansion and refurbishment expected to be finished in April 2015.

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