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Baxter International : Storms Disrupt Baxter Shipments -- WSJ

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09/28/2017 | 06:58am CEST
By Peter Loftus and Jonathan D. Rockoff 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (September 28, 2017).

Drug and hospital-product manufacturer Baxter International Inc. says it has lost "multiple production days" in hurricane-wracked Puerto Rico that will delay its ability to restore shipments of two products that were already in short supply on the U.S. mainland.

The products -- dextrose and sodium chloride, also known as saline -- are intravenous fluids given to hospital patients. The company disclosed the delays in a Sept. 22 letter to U.S. hospitals and other customers, saying Baxter was still assessing hurricane-related damage to its facilities.

U.S. hospitals already have been grappling with shortages of the drugs due to manufacturing problems and other issues unrelated to the hurricanes.

In May, Baxter said the Justice Department's antitrust division was investigating shortages of IV solutions including saline, as well as manufacturing, selling and pricing of the products.

Baxter said at the time it was cooperating with the investigation, and that it responsibly priced the products and was making efforts to help ensure the continuity of supply.

Baxter spokesman William Rader said Wednesday that the prior shortages were primarily for large-volume containers of IV solutions, which aren't made in Puerto Rico. The versions made in Puerto Rico come in smaller containers and are used primarily to be mixed with medications.

Baxter also said in a statement that the company took steps to mitigate a potential disruption to supply by transporting finished products off Puerto Rico in advance of the hurricanes.

The company said the product-allocation plan is designed to ensure equitable product distribution to customers.

Baxter said all of its sites sustained some damage, and repairs are under way. Baxter hopes to resume limited production "in the next few days."

Puerto Rico is home to many pharmaceutical factories that supply the U.S. and other markets.

Several big drugmakers have said their facilities weathered hurricanes Irma and Maria without much trouble.

U.S. Food and Drug Administration Commissioner Scott Gottlieb said in an interview Wednesday the agency is taking steps to mitigate the possibility of hurricane-related drug shortages, including working with companies to ensure products are shipped.

He said the agency is focused on avoiding shortages of a number of critical drugs that are made primarily in Puerto Rico. He said he couldn't identify specific drugs, but that they include cancer treatments.

"There's a significant amount of manufacturing on the island," he said. "If those facilities can't be restarted soon, we have concerns about the potential for drug shortages."

In a separate letter on Sept. 23, Baxter told customers it would conserve the supply of many products made in Puerto Rico, including IV solution bags, by allocating fixed amounts to U.S. hospital customers based on customers' average monthly purchases between March and August.

"Until our inventory assessments are completed, we will not be able to approve any requests for increase, exception or new allocation," Baxter said in the letter. "We regret this disruption to your daily operations and appreciate your patience as we re-establish our supply pipeline."

Bristol-Myers Squibb Co. said its plant in Humacao appeared to suffer some damage during the hurricane, but a second plant, in Manati, wasn't harmed. The Humacao plant makes the bloodthinner Eliquis as well as some older drugs. "Based on the contingency plans we have executed, we believe we have mitigated the risk to product supply regardless of that damage," a company spokesman said.

Pfizer Inc. said a preliminary assessment indicated that two of the company's three manufacturing plants had minimal damage, while a third had "minimal to moderate damage to parts of the facility." A spokesman said the company was trying to repair the damage as quickly as possible. "We have healthy supply of finished goods available for patients and do not see a risk to patient supply at this point," the spokesman said.

Corrections & Amplifications Bristol-Myers said a manufacturing plant in Manati, Puerto Rico, wasn't damaged by the hurricane. An earlier version of this article incorrectly stated the plant was in Guaynabo.

Write to Peter Loftus at [email protected] and Jonathan D. Rockoff at [email protected]

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