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What the Company That Let Spiders in Its Drugs Tells Us About Monopolies and Transparency

There's no better indicator of the new era of corporate transparency in the pharmaceutical business than this FDA warning letter sent to Braintree Labs, citing 21 consumer complaints about "insects, insect parts, and spiders" in its drugs.

It sounds disgusting and it is, especially when you realize that Braintree makes "gastrointestinal lavages" -- that stuff you have to drink gallons of to sweep out your bowels prior to a colonoscopy or colon surgery. (At least it comes in cherry, orange and pineapple flavors!)

The serious point here is that Braintree is being ritually humiliated in public by the feds for the same reason Johnson & Johnson (JNJ) is over its Tylenol defects -- the company ignored consumer complaints:

Your firm received 21 consumer complaints in 2008-2009 for the presence of foreign materials in five finished products (e.g., insects, insect parts, and spiders). Upon receipt of these complaints, you concluded that the foreign material could not be attributed to your firm's manufacturing practices. However, you did not conduct a thorough investigation to assess whether facility or raw material quality problems were at the root of these complaints.
There may once have been a time when companies could chug along in quiet little niches where sunlight rarely reached. Braintree was one of those companies. Its products are so dominant in the "whole bowel irrigation" category that they're the only brands anyone ever mentions for this purpose. Check out Braintree's press release page: It engaged with the public so rarely that all its statements going back to July 1984 can fit onto a single browser screen.

It's not just drugs. There are lots of tiny categories where single players, privately owned, reign over regional or category monopolies. I worked at one once. We were a regional supplier of oddly shaped cardboard boxes to food and drug companies in rural Northern England. And because we were the only game in town, we delivered those boxes when it was convenient to us. I know. I was the truck driver. I could arrive hours late and no one cared -- they just needed their boxes.

In that kind of business you could get away with ignoring your customers -- until the Internet came along and spoiled everything with its "news" and "information."

Those days are over. As I noted recently, the FDA is a much more active beast than it used to be. And it's much more transparent -- the agency will shortly enforce a plan where "complete response letters" (the rejections drug companies get when their proposed new meds don't pass muster) will be published, so the public and investors can see where companies went wrong.

The FDA wants Braintree to do four things:

  • Conduct thorough investigations of foreign matter complaints.
  • Increase pest control monitoring at your firm.
  • Review complaints for trends.
  • Identify foreign matter to determine origin.
Here's a fifth suggestion: Let some sunlight in. It's a good disinfectant.


Hat tip to Pharmalot. Image by Flickr user lucjonis, CC.