Stock Markets (Mar 11, 2021 07:20AM ET)
By Marisa Taylor and Dan Levine
(Reuters) – On a chilly spring morning in 2019, Amrit Mula arrived in her office at pharmaceutical giant Eli Lilly (NYSE:LLY) and Co’s factory in Branchburg, New Jersey, to find a desk drawer open that she had kept locked. Her files were missing.
Mula was a top human resources officer at what was one of America’s largest biotech plants. Over the years, she had been investigating employee complaints about manufacturing problems related to multiple drugs, including the company’s blockbuster diabetes medication, Trulicity, according to internal company documents and email correspondence reviewed by Reuters.
Among the most serious allegations: Records had been falsified or destroyed in the wake of manufacturing mistakes. In one case, according to 2018 emails among executives, company-mandated quality assurance documents were missing for Trulicity, which security filings show garnered more than $4 billion in sales in 2019.
Shortly after Mula discovered her files missing that day, her boss told her that Lilly was eliminating her position at the Branchburg plant, where she had worked nearly 15 years, according to a confidential “demand” letter from Mula’s lawyers to Lilly’s attorneys dated Dec. 30, 2019.
The letter, which seeks unspecified damages, portrays Mula as a good-faith whistleblower who repeatedly pressed her superiors to address serious problems at the factory, including staffing shortages, poor training, and record destruction and falsifications. Her inquiries, according to the letter and internal correspondence, were downplayed, ignored and sometimes blocked.
When she persisted, Lilly responded by “marginalizing, harassing and eventually terminating” her, according to the demand letter. Mula has not sued her former employer.
Reuters could not independently verify every claim in the letter. However, based on internal correspondence and other company documents reviewed by reporters, Mula repeatedly received complaints and raised concerns about everything from quality control to record-keeping with a host of Lilly managers and executives. Three former factory workers who spoke to Reuters on condition of anonymity said such problems were endemic at Branchburg, and U.S. Food and Drug Administration inspectors later identified some of the same concerns there.
“I was just doing my job,” Mula told Reuters, declining to comment further.
The demand letter and supporting documentation offer a rare look inside a Big Pharma company – one of the world’s largest – as it struggles with allegations of serious manufacturing violations, which can occur behind the scenes without being promptly investigated and addressed by a company or the FDA.
The pharmaceutical industry has become increasingly reliant on high-priced biologic drugs, like those made at Branchburg, for its profits. Made from living organisms, biologics are difficult and expensive to produce, and batches are particularly prone to microbial contamination.
In a statement, Lilly spokeswoman Kathryn Beiser said the company has “rigorous” quality assurance systems in place and welcomes feedback from employees.
Lilly is working closely with the FDA to address concerns about the factory, Beiser said, and the drugmaker voluntarily conducted a retrospective five-year review that found no impact on Branchburg’s product quality.
Lilly has “long-standing policies and procedures that enable – and encourage – individuals to come forward with information about any potential issues or concerns without fear of retribution,” Beiser said. “We are continuously strengthening and reinforcing a culture where our employees can be proud of our work, so in turn, doctors and patients can trust Lilly’s products have been ethically, properly, and safely manufactured.”
Beiser did not specifically address the issues raised by Mula.
On Tuesday, several days after receiving detailed questions from Reuters, Lilly announced the retirements of two senior vice presidents: Myles O’Neill, who heads Lilly’s manufacturing operations, and Melissa Barnes, who is chief ethics and compliance officer.
Beiser said the retirements were “long planned changes that reflect Lilly’s robust succession planning process” and that the company is grateful for the executives’ “tremendous” contributions. O’Neill and Barnes did not reply to emails seeking comment.
The internal Lilly documents portray a plant where a worker complained in capital letters about being “TIRED AND OVERBURDENED”; where substandard chemicals and ingredients were simply discarded and not reported as required; where safety hazards included the risk of electrocution from live wires; and where quality assurance records disappeared or were doctored. In one case, according to a 2018 email among managers, workers sifted through the garbage to find missing manufacturing records.
The FDA requires pharmaceutical companies to closely track such documents, including recording any deviations from mandated procedures. The record-keeping requirements are key to ensuring the quality of drugs, as defects may not be obvious to consumers or physicians, pharmaceutical and regulatory experts told Reuters. The FDA also requires companies to hire enough staff members and properly train them to ensure compliance with regulations.
As associate director of HR and employee relations since 2011, Mula was tasked with investigating workplace issues including manufacturing complaints. In doing so, she repeatedly encountered a lack of cooperation or pushback from her bosses, according to contemporaneous emails, Mula’s handwritten meeting notes and excerpts from an internal retaliation complaint she filed with the company in December 2018.
“I submit that (executives’) motivation was to discredit and deter me from completing the investigations that were yielding unfavorable results,” she wrote in the internal complaint, which was excerpted in the February 19, 2019, email to her direct supervisor.
At times, her bosses acted on her recommendations or said they would pass her concerns up the management chain, according to internal correspondence.
But the problems largely remained. Months after Mula left, FDA inspectors cited some of the same lapses she had flagged during her tenure and described in her demand letter. For instance, the inspectors found that on several occasions when serious manufacturing quality problems occurred – including in the case of Trulicity ingredients – “the firm failed to conduct a detailed investigation,” according to an August 21, 2020, FDA report.
Overall, the FDA classified its inspectors’ findings at the plant as “Official Action Indicated” or OAI, the most serious category of violations, according to FDA correspondence and reports reviewed by Reuters. If the problems aren’t corrected, an OAI finding can lead to the FDA’s prohibiting the sale of drugs made at the facility, drug quality experts told Reuters. The finding is the most serious sanction Lilly has received in about 12 years and is issued in only 7% of U.S. plant inspections, according to FDA records. The agency has not taken further public action.
Even so, the FDA announced last year that an antibody drug made at the Lilly plant called bamlanivimab could be used to treat COVID-19 on an emergency basis. After its inspections at Branchburg, the FDA required an independent lab to test batches of the treatment made there.
The FDA declined to comment, saying it does not usually discuss its dialogue with individual companies. The inspection reports reviewed by Reuters were heavily redacted by the agency to protect the company’s trade secrets and financial information.
Three outside experts who reviewed the FDA inspection records for Reuters said such manufacturing violations could erode the potency, purity or safety of drugs. It’s crucial to log the processing temperatures and times of drugs and what raw materials are used, said Susan Bain, an assistant professor of regulatory and quality sciences at the University of Southern California who once conducted FDA factory inspections.
Based on her review of the FDA inspection records, she described the quality assurance at the Branchburg plant as “so wildly out of control it’s scary.”
“Ultimately, you don’t know what the heck went on,” Bain added.
RISING DEMAND, SHRINKING STAFF
Lilly’s factory in Branchburg sits at an epicenter of U.S. drug manufacturing, with many of the company’s competitors close by.
Mula went to work there in 2004, when the plant was owned by ImClone Systems, then embroiled in an insider trading scandal involving celebrity businesswoman Martha Stewart. Four years later, Eli Lilly bought the company and the plant for $6.5 billion.
Ever since, the biologics produced in Branchburg have become increasingly important to Lilly’s bottom line. Biologics are not as easily copied by competitors as conventional pharmaceuticals are and therefore can stay profitable longer.
Lilly developed Trulicity as Type-2 diabetes diagnoses exploded worldwide. The widely advertised medicine, introduced in 2014, is prescribed to help lower blood glucose levels and reduce, or avoid, the need for regular insulin injections. Trulicity, which is injected weekly, also may help with weight loss, according to a Lilly promotional website.
After David Ricks became CEO in 2017, he sought to cut costs through a global reduction of about 3,500 employees – roughly 8% of Lilly’s staff. Many employees took early retirements, and a top quality control official at the New Jersey plant departed.
Fewer and fewer employees at the Branchburg plant were available to prepare critical ingredients used in manufacturing drugs, three people who worked in the plant told Reuters. In addition, many workers were assigned tasks above their experience and training levels, they said.
Ricks referred Reuters questions to a Lilly spokesperson.
The process of manufacturing biologics is complex and delicate; every step and ingredient is tightly controlled. The drugs start as cells in large vats where they are fed ingredients to help them multiply. Then the batches are purified in a series of containers with substances to make them suitable for human absorption. Workers in sterile areas are required to wear protective gear covering their entire bodies. Even skin cell flaking was cited as a possible source of contamination at Branchburg, according to a 2018 employee complaint.
Critical tasks often required at least two people – one to perform a step and another to verify it was done correctly. In some cases, workers reported they didn’t have supervisors to check with on how to properly handle contamination or disposal of unusable materials.
‘STOP THIS STUPIDITY’
By 2018, serious complaints from factory workers and allegations of manufacturing violations were piling up on Mula’s desk, the internal Lilly records reviewed by Reuters show.
On Aug. 9, an anonymous employee called Lilly’s ethics and compliance hot line to report that inadequate staffing and high turnover was a problem at Branchburg, leading to a “heightened stressful environment because employees are handling multiple jobs at once,” according to a complaint recorded by the hot line call center.
Around the same period, emails show, Mula was notified that contamination or other errors in at least nine instances led ingredients or other materials to be discarded. According to the emails, Mula suspected in some cases that the items were improperly disposed of or “dumped” inside the factory.
Two of the 2018 incidents involved Trulicity, Mula told her supervisor, Richard Ruth, in emails the following February. Altogether, Mula said at least $2 million in materials for various drugs were lost to dumping, according to an email she sent to a human resources superior, Efraim Ortiz, whom she thanked for confirming that number.
Both Ortiz and Ruth declined to comment and referred questions to a company spokesperson.
On Oct. 1, 2018, Mula received the complaint from an unidentified factory employee in all-caps via interoffice mail, beseeching her for help.
“WE ARE TIRED AND OVERBURDENED AND DON’T HAVE ENOUGH PEOPLE WORKING ON THE FLOOR,” it said. “PLEASE SUPPORT US AND STOP THIS STUPIDITY.”
On October 11, Mula asked a quality assurance official in an email if her unit had enough staff. The response: “No.”
In her statement, Lilly spokeswoman Beiser said the company ensures that the staffing at all its sites is appropriate, and Branchburg has seen only marginal variations in staffing levels over the past six years. She did not disclose specific figures.
Then-plant manager Victor Cruz and other Branchburg executives pledged at times to cooperate with Mula’s multiple inquiries, the email correspondence shows. But some of the executives also suggested to Mula that there wasn’t a quality problem at the plant, or advised her to let officials in Lilly’s dedicated quality unit resolve the matters.
“We would not proceed with executing any manufacturing operation if we did not have the trained staff to perform that operation,” Liz Gosen, then Branchburg’s vice president of manufacturing operations, wrote to Mula in an October 2018 email. “This would be a violation of our procedures.”
Mula also raised her concerns about staffing in an October meeting with Lilly’s vice president of quality, Leanne Hickman, according to emails between the two.
That same day, plant manager Cruz told Ruth he could no longer work with Mula, emails show. Later, Mula heard that Cruz had announced at a company party that she was going to be reassigned or removed, according to the emails.
Two other managers also had filed complaints against Mula, accusing her of badmouthing her superiors and spreading rumors about an interoffice affair, the emails show.
Ruth later acknowledged in emails to Mula that the managers’ complaints had been unfounded and were dismissed.
It was “determined that there was no violation and no further action regarding the allegations that were brought forward against you” was needed, Ruth wrote in December 2018.
Cruz and Hickman did not respond to requests for comment. Gosen declined to comment.
On Oct. 22, an associate director at the plant emailed Mula and two others to report that records of a Trulicity manufacturing upgrade were missing. Looking for the records entailed “climbing and sifting through garbage,” the associate director said.
By then, turbocharged global demand had vaulted Trulicity over three other Lilly drugs – including erectile dysfunction medicine Cialis – to become the company’s best seller.
COMING TO A HEAD
The pressure on Mula mounted.
In February 2019 emails, a senior manufacturing executive, Darin Moody, told factory managers that he had to attest to “material compliance” with Lilly’s “Red Book” code of conduct and company policies.
However, Mula emailed Ruth and Nellie Clark, who had replaced Cruz as plant manager, on Feb. 5, saying that she “cannot with integrity confirm that all (Branchburg) cases have been escalated as appropriate” by the senior leadership team at the plant.
Mula brought up what she called “one reckless example” in January 2019 that had not been investigated: wet mopping around live electrical wires, posing a risk of electrocution.
“The fact that the event didn’t result in a fatality is shocking,” Mula wrote.
Mula told Ruth she was “excluded” from a meeting with the plant leaders about the incident.
“I would ask that you permit me to do my job and examine the situation despite anticipated rebuffs from Nellie (Clark) and Efraim (Ortiz),” she wrote to Ruth.
Initially, plant managers recommended “verbal” coaching for the employees involved. Ultimately, Mula successfully pushed for written warnings, the emails show.
In email correspondence that February, Mula told Ruth that the upper-level Branchburg managers were not providing detailed information that she needed to conduct her inquiries.
Clark did not respond to requests for comment.
On Feb. 28, 2019, Ruth emailed Mula some positive news.
Ruth told Mula that she “sufficiently” met expectations and would be receiving a bonus. In a later email, he complimented Mula on her work on the electrical wires investigation: “Well done, Amrit.”
Around the same time, however, plant manager Clark told Mula she was “displeased” with Mula’s findings of violations and recommendations for discipline, according to Mula’s demand letter.
Shortly afterward, according to the letter, Mula met three Lilly scientists who alleged that the company discarded a batch of Trulicity worth $8 million to $10 million after data falsification led to contamination during manufacturing. The letter says Clark responded in a mid-March meeting: “We don’t want to mess with Trulicity.” Clark then threatened to remove Mula from her position at the Branchburg plant, the demand letter alleges.
Reuters could not independently confirm the mass discarding of Trulicity or Clark’s comments about the drug or Mula.
On March 28, the day Mula found her files gone, Ruth flew into Branchburg from Lilly’s Indianapolis headquarters, according to email and instant messages he sent to Mula at the time. Once there, he told her that her position was being eliminated.
According to a March 28 notification letter Mula received from the company, the job was being eliminated due to a need to reallocate resources “to compete in a new business environment.” Mula was offered a roughly $96,000 severance and the opportunity to apply for another position, according to the March 28 letter and her demand letter.
ENTER THE FEDS
In November 2019, eight months after Mula’s dismissal, FDA inspectors showed up at the plant for a routine inspection.
Among a host of problems cited by the inspectors: The company did not keep proper records to verify that its quality management systems were operating in compliance with FDA regulations – a concern Mula had been raising for more than two years.
The FDA red-flagged the problems with its “Official Action Indicated” designation.
On a subsequent inspection that began in July 2020, the FDA discovered signs that Lilly was systematically downplaying significant manufacturing problems, said Peter Calcott, a pharmaceutical consultant and instructor at the extension program of the University of California, Berkeley, among those who reviewed the FDA records for Reuters.
“As a patient, I’m more worried about that,” Calcott said.
In July 2020, for instance, FDA inspectors found that when the plant’s tests of a migraine treatment drug called Emgality showed problems, the plant repeated those tests until it got the results needed to finish the manufacturing process, according to the FDA documents reviewed by Reuters.
During that same inspection, the FDA found that Lilly discarded a batch of drug ingredients that had been used incorrectly in May 2020, without investigating the matter or keeping proper records. It is not possible to tell from the redacted documents which drug was at issue.
The company’s vice president of manufacturing, who is not named in the FDA report, told the agency that the workers responsible “are no longer employed with the firm” due to “the severity of the issue,” the inspectors wrote.
FDA investigators said that the May incident and lack of follow-up investigation was not an “isolated occurrence,” as they said Lilly had claimed. They cited three similar instances in 2020 alone and could not determine whether the company had addressed the problems, according to their August inspection report.
In September, a month after the FDA inspection, Lilly drew up internal talking points to brief employees on the agency’s findings and remind them how to comply with regulations. Workers were instructed, for instance, not to use informal record-keeping such as “sticky notes.”
Lilly asserted in the briefing that it had made “tremendous progress.” If problems arise again, the company advised employees, “speak up.”
(Marisa Taylor reported from Washington, D.C.; Dan Levine from San Francisco. Editing by Michele Gershberg and Julie Marquis)Special Report: Insider alleges Eli Lilly blocked her efforts to sound alarms about U.S. drug factory Add a Comment