Fort Washington plant still on hold, but J&J says more Tylenol and Motrin on shelves

Though its Fort Washington plant is still being under repair and overall profits fell 10 percent in the first quarter of 2013, Johnson & Johnson said Tuesday that it has put more Tylenol and Motrin on store shelves in the United States through its McNeil Consumer Healthcare unit.

"We are pleased with results in our consumer division, with over-the-counter sales in the U.S. up 14 percent," J&J chief financial officer Dominic Caruso said in a conference call with stock market analysts.

J&J's consumer division includes products from outside the domain of the McNeil unit, which has both its headquarters and the idle factory in Fort Washington, Montgomery County. Johnson & Johnson is based in New Brunswick, N.J., and it has multiple divisions in the Philadelphia region. Besides the facilities in Fort Washington, the McNeil unit also has plants in Lancaster and Las Piedras, Puerto Rico.

"We had a rollout of products in the marketplace," Caruso said, "and we had a quote 'healthy' cold and flu season from our perspective."

When more people get colds and suffer from the flu, health-care companies including J&J sell more prescription medicine and over-the-counter products.

Thousands of employees show up every work day in Fort Washington, but the plant has not sent medicine to stores since it was shutdown in 2010 after repeated manufacturing problems resulted in dozens of recalls.

The company said it has spent more than $100 million in repairs, but the U.S. Food and Drug Administration and a federal judge will have to approve the remediation to the new facility before it can resume making medicine for sale.

The Lancaster and Las Piedras plants are operating, but under the closer scrutiny of a so-called consent decree that the company signed with the federal government. By focusing on doing a few products well and shifting production to overseas plants, the company is trying to regain its share of the over-the-counter market.

Caruso said the company hoped to have about 75 percent of products back to shelves by the end of 2013.

Caruso was not asked by analysts - and he did not volunteer information - about any update on the timetable for getting FDA and judicial approval to resume production in Fort Washington. Previously, the company has said it hopes that might occur at the end of 2013 or early 2014.

"We'll do what we can to invest behind the brands," Caruso said of advertising and promotion that would follow resumption of reliable supplies.

In June of 2012, J&J completed its $19.7 billion acquisition of medical device maker Synthes, whose U.S. headquarters was in West Chester, Chester County. The increased revenue from Synthes' plates, rods, screws and nails have helped keep J&J going amid other challenges, but Caruso said the overall market for devices was somewhat flat and he was only mildly optimistic about that segment going forward.

"Hospitals are predicting lower levels of procedure volume," Caruso said.

J&J took a $600 million charge to deal with litigation and the integration of Synthes.

Regarding the Synthes integration to the DePuy-Synthes division, J&J adopted the Synthes sales model of using company-paid sales representatives instead of distributors. But there have been some supply inconsistencies.

"There is a long-term benefit to direct sales that will allow us to compete in the spine space," Caruso said.

Synthes spine division created some of the litigation that has now transferred to J&J. Four Synthes executives went to prison after pleading guilty to charges stemming from an illegal clinical trial of bone cement. But suits from family members of three patients who died on the operating table continue.

J&J said in its February annual report that it face thousands of lawsuits over vaginal mesh implants. Meanwhile, there are multiple investigations and suits - individual, state and federal - pending regarding the antipsychotic drug Risperdal. J&J said last year it reached a tentative deal with the Justice Department over allegations about marketing practices and kickbacks to a nursing home company. Some reports in the media suggested J&J would have to pay $2.2 billion. But the deal has not been finalized by the Justice Department.