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Compounding Pharmacies Facing Lawsuits and Regulation

by APICS staff | N/A 2013 | 13 | 7

In September of last year, a fungal meningitis outbreak sickened 730 people and killed at least 51. The problems were traced to shots produced by a compounding pharmacy, the New England Compounding Center (NECC). USA Today now reports the fallout from the incident includes lawsuits and calls for greater oversight of compounding pharmacies.

At compounding pharmacies, drugs are mixed and combined to meet the needs of individuals with existing prescriptions. Unlike drug manufacturers, compounding pharmacies are not regulated by the Food and Drug Administration. However, critics say many of these companies, including the NECC, are performing manufacturing functions. “They’re actually creating a product for a huge number of people … there’s a whole level of regulatory management that’s just not there,” says Michael Wissel, pharmacy services manager for the Michigan Department of Licensing and Regulatory Affairs.

Inspections of NECC showed serious concerns about health and safety, and FDA tests showed microbial growth in their medicines. “I think it’s as simple as an unregulated industry that was allowed to expand so fast without government oversight that shortcuts were taken to try to get more product manufactured to make more money,” says Terry Dawes, an attorney representing people affected by the outbreak.

According to the FDA, the group lacks the current authority to properly regulate compounding pharmacies to protect public health.

Google Glass to Be Assembled in America 

Google’s upcoming Project Glass, its much-hyped high-tech eyewear, will be assembled in Santa Clara, California, the Financial Times reports. Many components, however, will be sourced from Asia. To make the gadgets, Google is partnering with Hon Hai Precision Industry, a Taiwanese contract manufacturer also known as Foxconn.

The devices will have a relatively small initial production run, as Google has announced it would give 8,000 contest winners the opportunity to buy Google Glass for $1,500.

The Times reports that Google’s decision bolsters President Barack Obama’s pledge from his State of the Union address to ensure that America is “the next revolution in manufacturing.” Recently, Apple pledged to invest $100 million in US manufacturing, and Foxconn has stated it would expand its American operations to match consumer desires.

Chocolate Makers Adapting to Shortages, Higher Prices

Amid shortages of cocoa supplies, cost increases, and changing consumer patterns, many candy makers were forced to adjust their strategies to adapt, the Los Angeles Times reports. Global production of cocoa fell 6.1 percent last year and is forecasted to slip further. The price of sugar has risen, on average, 11.6 percent a year for the past five years. Finally, consumers in the United States also are eating less chocolate, citing health concerns and higher prices.

Some candy sellers are investing in improvements to farming communities and productivity, as well as looking to areas that aren’t known for cocoa production, such as Vietnam and China. Others are resorting to layoffs__employment at US chocolate companies has slipped 2.2 percent a year since 2007. To maintain competitive advantage, many companies also are diversifying their products with health-minded options and smaller portion sizes.

Marketing also is a large part of candy companies’ strategies. See’s Candies, a San Francisco-based chocolatier, is trying to shed its old-fashioned image. And many companies are targeting seasons with their products rather than specific holidays, when a lot of product becomes stuck on shelves following the holiday itself. “The move is to stretch the occasion beyond a day,” says Marcia Mogelonsky, an analyst at global market research firm Mintel. “Companies have to extend the salability of the product or they’ll lose money.”

Trade Group Unveils Alternative to Indian Manufacturing Restrictions

Recently, India’s government has proposed requirements that devices such as smartphones and laptops meant for the Indian market must be produced in India. Now, the Manufacturers’ Association for Information Technology (MAIT), an India-based industry trade group with many major US companies as members, is recommending an alternate system that reduces the restrictions but ensures that Indian companies can access foreign technology to assist in manufacturing, the Wall Street Journal reports.

According to the trade group, enabling stronger local manufacturing is a better plan than mandating all products be made locally. Foreign companies would likely face difficulties getting factories built quickly, and Indian companies currently lack the technology to supply outside firms. Further, the group’s proposal includes tax revenue earned from licensing intellectual property purchased through the platform.

“The government wants to reduce its dependence on imports and that’s a fair thought,” says Anwar Shirpurwala, executive director of MAIT. “But in electronics we’re nothing but traders … we want to create a pool of [intellectual property] that can be used.” Critics of the plan say the information exchange platform would have limited relevance and impact.

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