Quality assurance failures and FDA regulatory action at Sandoz facility in Austria cause significant financial injury for Monsanto
SAINT LOUIS, Aug. 3 LAWFUEL – The Legal Newswire — Monsanto Company
announced today that it has filed an arbitration claim against Sandoz, a
subsidiary of the pharmaceutical company Novartis AG, in an international
arbitration proceeding. Monsanto seeks to recover damages caused by
Sandoz’s inadequate quality assurance program and the U.S. Food and Drug
Administration (FDA) issuance of a Warning Letter to Sandoz’s
pharmaceutical facility in Kundl, Austria, which contracted to supply
Monsanto’s dairy product, POSILAC bovine somatotropin. All products sold by Monsanto met quality control standards, but the process of making necessary changes and improvements to the facility limited manufacturing
Supplies to Monsanto and its customers were disrupted as a result of
Sandoz’s failure to meet quality assurance obligations that were warranted and represented by Sandoz as satisfying compliance with FDA’s current Good Manufacturing Practices standards.
In November 2003, the FDA inspected the Sandoz manufacturing facility
in Kundl, Austria, and found problems with the facility and systems that
led to the issuance of an FDA Warning Letter. The process of making
necessary changes and corrections addressed quality assurance, but required shut-downs and limited manufacturing capabilities at the Sandoz plant. FDA conducted a follow-up regulatory inspection in 2006 and lifted its Warning Letter in August 2006.
“Sandoz’s failure to maintain the quality practices expected by FDA was a clear breach of its contractual obligations ,” said David Snively, senior vice president and general counsel for Monsanto. “Since discussions with
Sandoz to resolve this issue were inconclusive, we have filed for
arbitration with the International Chamber of Commerce, according to the
provisions of the contract, seeking in excess of $100 million in damages.
Arbitration will determine how much compensation is owed by Sandoz to
The arbitration complaint notes that as a direct result of Sandoz’s
quality assurance failures, it did not fulfill its contractual supply
agreements and Monsanto suffered extensive financial loss.
Since Monsanto’s dairy industry product was first sold in the U.S. in
1994, POSILAC has become the leading dairy animal pharmaceutical supplement in the United States. Supplementing dairy cows with POSILAC safely enhances milk production and serves as an important tool to help dairy producers of all sizes improve the efficiency of their operations. Cows supplemented with POSILAC produce an average of 10 lb. more milk per day.
Monsanto Company is a leading provider of technology-based solutions
and agricultural products that improve farm productivity and food quality.
For more information on Monsanto, see http://www.monsanto.com.
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