MDS has been working with the FDA on this concern over testsat the two facilities since 2004. MDS initially agreed to undertake acomprehensive self-review of bioequivalence studies conducted at its St. Laurent facility from 2000 through 2004 and afterthat, the FDA conducted an inspection of MDS Pharma's bioequivalence operationsin St. Laurent and Blainvilleduring March 2006. In September 2006, the FDA sent MDS Pharma a letter that wascritical of the management and the effectiveness of the retrospective review andexpressed the feeling that their concerns had not been fully addressed.
As of the fourth quarter 2006, MDS Pharma reported that itwas continuing to devote "substantial effort and resources" in the conduct ofthe retrospective review, and noted that it has incurred direct costs of $10million in that quarter as a result. Full year costs for 2006 regarding thetesting issue were $31 million, including direct labor, consulting costs, andthe cost of related customer accommodations.
DeFalco commended the FDA for developing a "practical andefficient path" for closure of the review of bioanalytical studies conducted atthe Quebec facilities, a paththat includes three options for MDS customers: redoing the studies, reanalyzingthe samples or conducting an independent audit of the data. "We remain committed to working with the agency andour customers to bring final closure to this issue," DeFalco says.
