Special Report: How secrecy in U.S. courts hobbles regulators

By Mike Spector, Jaimi Dowdell and Benjamin Lesser

LEBANON, Ohio (Reuters) – Something wasn’t right with the Rhino.

Reports started trickling in to the Consumer Product Safety Commission (CPSC) in 2005 of people being killed or injured in the Yamaha Motor Co off-road vehicles when they tipped over. But no clear pattern emerged, and in the rough and tumble off-road world, accidents are common. The agency took no action.

Then, in 2007, ten-year-old Ellie Sand was killed in a Rhino when it flipped in a cornfield in Warren County, Ohio. Her father, house painter John Sand, started reading up on other Rhino crashes. He spoke to other parents whose children had died or been seriously injured in similar incidents. He became convinced that Rhinos were the problem.

Using a computer in a Cincinnati law library, Sand found more than a dozen lawsuits alleging that the vehicles were dangerously unstable. Some of the lawsuits – like the one he filed against the company in 2008 – claimed that design flaws caused the Rhinos to roll over even at slow speeds on flat ground. Sand sent the results of his research to CPSC, highlighting details from the lawsuits of the tip-overs that led to deaths and injuries.

Soon after, CPSC sent a subpoena to Yamaha, forcing it to hand over a trove of information, much of which had lain hidden under judges’ protective orders in the lawsuits against the company. By then, more than 40 people, including more than a dozen children, had been killed in Rhino crashes.

The impact of Sand’s work was confirmed in a voicemail message Sand received a few months later. Yamaha had agreed to a voluntary recall covering more than 100,000 Rhinos to fix the stability problems. “As a result of the information – a lot of the information that we received from you – we’ve gotten this far, so I wanted to thank you,” Marc Schoem, then deputy director of CPSC’s compliance and field operations, said in the March 31, 2009, message, which was reviewed by Reuters.

Five years after the recall was announced, CPSC staff noted in a 2014 briefing that crashes involving the Rhino had “decreased noticeably.”

Sand told Reuters he “was elated that the work I’d done could help stop the carnage.” Still, he was surprised that it took an “average Joe” like him to flag the lawsuits to CPSC.

A CPSC spokesman said that the agency had investigated Rhino incidents and that establishing a pattern that would have supported finding the vehicles defective proved challenging. Schoem declined to comment, as did Yamaha.

ERRORS AND INCONSISTENCIES

CPSC is one of more than a dozen regulatory agencies tasked with protecting Americans from dangerous products. And the Rhino episode reveals a troubling dynamic in the way these watchdogs do their jobs: Sometimes the only way they can learn about and act on a possible threat to consumers is from evidence produced in lawsuits, but that evidence is often hidden behind a wall of secrecy.

Most regulators have their own reporting systems for conducting oversight. But their databases can be vast and unwieldy, stuffed with thousands and even millions of consumer complaints and reports from manufacturers of safety concerns, injuries or deaths. The reports are often rife with mistakes and inconsistencies. Not all consumers even know they can file complaints. And companies regularly flout legally mandated reporting requirements.

That leaves the courts as a conduit for alerting regulators to potential harm, and it’s far from perfect. As Reuters has documented in earlier articles in this series, a thick blanket of secrecy covers product-liability litigation in the United States. In just a handful of cases over the past several decades, hundreds of thousands of people were killed or injured by defective products – cars, drugs, guns – while information about the risks was hidden from consumers and regulators, sometimes for years, behind broad protective orders.

These orders, though meant to protect specific information such as medical records and trade secrets, often give companies wide latitude to designate as confidential material exchanged between litigants in the pretrial discovery process – internal emails, data, research, meeting minutes, sworn depositions and the like. The secrecy typically persists for the life of the case, and long after, though court documents are, by law, presumed to be public.

In an analysis of some of the largest mass defective-product cases consolidated in federal courts over the past 20 years, Reuters found 55 in which judges sealed information concerning public health and safety. And among those, only three had protective orders containing language specifically allowing information exchanged by the litigants to be shared with regulators.

Regulators may subpoena information from a manufacturer after spotting a suspicious cluster of lawsuits, or after being alerted by a consumer like Sand in the Yamaha Rhino case.

But those are rare exceptions. And regulators themselves aren’t inclined to mine court records as a means of oversight. In the 55 big cases Reuters reviewed, public court filings contained no indication that regulators had requested any information arising from the lawsuits.

A few years ago, the National Highway Traffic Safety Administration (NHTSA) and CPSC issued pleas for easier access to evidence introduced in court under protective orders. But the Environmental Protection Agency, the Food and Drug Administration (FDA) and 15 other federal departments or agencies surveyed by Reuters did not point to any explicit policy or guidance on gaining access to court evidence potentially relevant to their oversight functions.

Yet regulators have repeatedly documented the failures of existing safeguards. Since 2009, NHTSA and CPSC have fined a total of at least 90 companies for failing to meet safety-reporting requirements, while the FDA has issued more than a dozen warning letters to manufacturers of drugs and medical devices for similar lapses.

Big business and its lobbyists contend that regulators have all the tools they need to do their jobs well – including the power to subpoena information subject to a judge’s protective order.

“The protective order cannot block the government,” said Victor Schwartz, a partner at law firm Shook, Hardy & Bacon LLP who has defended companies in civil litigation. “Litigation gets publicity. If the government sees something about a case … it can use its power, the subpoena power, to find out more detail,” he said.

That argument, former U.S. regulatory officials said, doesn’t hold water when litigation is cloaked in secrecy. “It’s a catch-22,” said David Friedman, a former NHTSA official. If documents and other evidence in litigation are sealed, “how are you supposed to know about them?” Friedman said. “If you don’t know about them, you can’t get them.”

DEFECTIVE SWITCH

Friedman was at NHTSA during General Motors Co’s notorious 2014 recall of millions of cars with defective ignition switches, ultimately linked to 124 deaths and 275 injuries. A 2015 deferred prosecution agreement between GM and federal prosecutors showed the company scrambled for years to make sense of mounting reports of deaths and injuries while keeping regulators and the public in the dark about the switches, even after uncovering clear internal evidence they were defective.

As early as 2003, NHTSA received complaints that Saturn Ions were stalling and, by 2004, that their airbags were failing to deploy in collisions. Similar complaints soon cropped up about Chevrolet Cobalts. In the ensuing years, the agency examined several fatal Cobalt crashes, each involving switches that slipped out of position and disabled airbags.

Yet NHTSA didn’t make the connection between the switch problem and airbag failures. That was partly because its investigators misunderstood how GM’s airbag system operated, but also because NHTSA rules gave automakers a lot of leeway in how they reported certain information regarding safety risks. As a result, similar incidents were reported inconsistently. One was listed as an “engine and engine cooling” issue, for instance, while another as an “electrical” problem. That made it difficult for regulators to detect a pattern.

From the first consumer complaints and incident reports, it would be more than 10 years and scores of deaths and injuries before NHTSA and the public learned of the link between defective ignition switches and airbag failures – and then only after evidence of what GM knew emerged in litigation and prompted the automaker to pursue a recall.

In June 2011, the parents of Jennifer Brooke Melton filed a product-liability lawsuit against the company in a Georgia state court. Melton, a 29-year-old nurse, was killed in March 2010 when her Cobalt stalled on a rainy highway, crossed into oncoming traffic, collided with another vehicle and careened into a creek.

The Melton case started, as many like it do, under a veil of secrecy. In December 2011, Judge Kathryn Tanksley approved a broad protective order, keeping from the public and NHTSA any documents that GM designated “in good faith” as confidential.

Tanksley, now retired, said she approved the order because both the Meltons’ lawyer and GM agreed to the terms. “The role of litigation is not to regulate GM,” she said. When NHTSA officials want more information, she said, they “have to pursue it not through the court, but through their own power.”

The documents GM began turning over to Lance Cooper, the Meltons’ lawyer, were damning. They showed that in 2005, for example, a company engineer suggested a fix for less than $1 per vehicle, but it was rejected as too costly and not effective enough. Cooper also obtained evidence that the company modified the switches between 2005 and 2008 to keep them from slipping. The evidence built a strong case that GM had known for years that the switches were faulty.

The Meltons were eager to go public with the evidence to prevent others from dying as their daughter had, but Cooper worried that if he challenged the protective order and regulators didn’t conclude the switches were defective, it would hurt their case. GM wanted to settle.

“We thought that people needed to know. There were still people out there driving those cars,” Beth Melton told Reuters. “It’s a real shame that these things are kept secret and other people (suffer) because of it.”

Meanwhile, a Cobalt crash in Quebec, Canada, killed another driver. The airbags did not deploy. The ignition switch was later found to be in accessory mode, the position between on and off that could cut power to airbags.

GM settled with the Meltons in September 2013 for $5 million. Five months later, after conducting its own investigation, GM recalled about 600,000 vehicles with the ignition switch.

Cooper still wasn’t satisfied, based on what he had learned in the Melton lawsuit, and having obtained a settlement for his clients, he decided it was time to share evidence with NHTSA. “I basically said: ‘The hell with it,’ ” Cooper said. “If we can get this information to the federal government, they need it. Really, it was just a strategic decision to violate the protective order.”

In a letter to NHTSA , he suggested that the automaker knew about the defect far longer than its recall paperwork said and had not recalled enough vehicles. He urged the agency to investigate, citing evidence from the Melton case that he had seen as much as a year earlier.

Eventually, NHTSA, Congress and federal prosecutors all investigated, relying heavily on evidence from the Melton case. GM increased the size of the recall, which eventually covered 2.6 million vehicles.

In May 2014, NHTSA fined GM $35 million for failing to alert regulators to the defective ignition switch in a timely manner. The next year, GM entered into the deferred prosecution agreement with the U.S. Attorney’s Office for the Southern District of New York to settle criminal charges of concealing information from government officials and wire fraud. Under the deal, GM agreed to pay a $900 million fine and to submit to three years of oversight by an independent monitor. In 2018, a federal judge dismissed the charges against the company after prosecutors said the company had complied with the agreement.

“The most damning information came out in litigation,” said Kevin Vincent, NHTSA’s head lawyer at the time. Though the facts eventually came to light, Vincent said, initial confidentiality in the Melton case “stymied” the agency. “That was evidence the agency needed to see,” he said. “We could have acted sooner.”

In a statement to Reuters, GM said: “Since 2014, we have undertaken comprehensive reforms across the company to ensure that something like the ignition switch crisis never happens again.” The company hired additional safety investigators, created a new executive position charged with overseeing global safety and recalls, and launched a program aimed at giving employees and dealers easier ways to flag potential vehicle defects.

A NHTSA spokesman said the agency took 17 steps the U.S. Transportation Department inspector general recommended in the wake of the ignition-switch recall to improve collection and analysis of vehicle safety data.

PLEAS FOR ACCESS

In 2016, NHTSA and CPSC, seeking to address what they acknowledge is a blind spot in their efforts to safeguard consumers, issued bulletins recommending that judges and litigants agree to protective orders that would allow them to share confidential evidence pertinent to public health and safety with the relevant regulators.

“Our job is to protect consumers,” said Marietta Robinson, a CPSC commissioner at the time. “Obtaining information about an allegedly dangerous product from a lawyer representing a consumer who has been injured or killed is critically important to us doing that job.”

NHTSA’s bulletin, which cited the GM ignition-switch case, argued that keeping such information hidden from regulators clashes with federal legal requirements for courts to show “good cause” before allowing companies to keep it secret.

But the bulletins, published in the Federal Register, where the government publishes new rules, proposals and public notices, carried no enforcement power, and they have had little impact.

Judges have rarely shown willingness to grant requests from plaintiffs, expert witnesses or news organizations to share information with regulators or the public. Lawyers challenged defendants’ claims of confidentiality for material relating to public health and safety in 26 of the 55 big cases Reuters analyzed, and in most of them, judges refused to unseal the evidence. Some of those cases involved attempts to share information with the FDA.

The FDA declined to comment on specific cases for this article. In general, the agency said, its powers to inspect drug makers’ plants and launch criminal investigations, along with voluntary reporting requirements for drug makers, “provide FDA with the tools to keep patients and consumers safe and fulfill its mission to protect and promote the public health.”

However, in the case of Pfizer Inc’s popular drug Chantix, which helps people quit smoking, court secrecy excluded possibly pertinent information from the agency’s process for assessing safety.

The FDA approved Chantix in 2006. Three years later, it placed a black box warning – its strongest – on the drug’s label after receiving “reports of changes in behavior such as hostility, agitation, depressed mood, and suicidal thoughts or actions.”

Over time, Pfizer faced thousands of lawsuits blaming Chantix for such side effects. The company turned over millions of documents to plaintiffs under the condition they be kept confidential.

In 2014, after Pfizer settled most of the cases for about $300 million, two plaintiff experts decided the FDA and the public should see internal Pfizer documents and expert reports that had been introduced in litigation.

Through their lawyer, clinical psychiatrist Joseph Glenmullen and drug safety researcher Thomas Moore asked the judge overseeing the bulk of the Chantix litigation to unseal the information, which they said was important for “shedding light on Pfizer’s awareness of Chantix’s behavioral risks.”

Two days after their request was filed, U.S. District Judge Inge Johnson in Alabama rejected it. Her brief order did not address the substance of the request.

Johnson did not respond to requests for comment.

The upshot was that, two years later, an FDA advisory panel did not have access to all the information the two men had sought to make public as it considered a Pfizer request to remove the black box warning. Pfizer’s request was based on its own study claiming that Chantix did not have a significant association with depression and suicide.

The advisory panel of medical experts in September 2016 recommended in a close vote to remove the black box warning. The FDA removed the black box warning a few months later. Chantix bottles still carry a less severe warning of potential mental health side effects.

Moore acknowledged that it’s impossible to know whether the evidence he and Glenmullen sought to provide to regulators would have changed the panel’s decision. But he said he remains frustrated that information “central” to the question of Chantix’s safety never made it into regulators’ hands.

“The FDA should be able to see it,” Moore said.

Pfizer, in a statement to Reuters, said: “The FDA and its 2016 advisory panel had access to all of the data and science on Chantix, and all of the adverse events reports.” The plaintiff experts’ reports, the company noted, were not original science and instead reflected views of the underlying science that differed from the FDA and the advisory panel’s conclusions.

Members of the FDA advisory panel Reuters contacted said they were unaware of Moore and Glenmullen’s efforts.

One of them was Dr Jess Fiedorowicz, director of the University of Iowa Mood Disorders Center. He voted to remove the black box warning. He said he didn’t know whether the evidence from the two experts would have changed his mind, but, “I’m all for transparency in research.”

SEEKING SUNSHINE

In September, House Judiciary Committee Chairman Jerrold Nadler, a New York Democrat, said he planned to reintroduce the Sunshine in Litigation Act to address the problem of court secrecy. The bill would allow parties in litigation to share evidence related to public health and safety with state and federal regulators, regardless of protective orders.

Nadler’s pledge came during a hearing on courtroom transparency that was called after Reuters began publishing its series on court secrecy and its impact on public health and safety. Previous iterations of the bill introduced repeatedly since the early 1990s, despite enjoying bipartisan support, have ultimately failed in the face of sustained opposition from business groups that contend it would increase the costs and burdens of litigation for companies that are already meeting regulatory reporting requirements.

However, as the Yamaha Rhino episode and others like it show, regulators and the public can’t assume manufacturers are meeting disclosure and reporting rules.

A few months after John Sand sent a packet stuffed with his research to CPSC, the agency told Yamaha it had received information indicating that the Rhino could roll over at low speeds on flat ground, posing “an unreasonable risk of injury or death to riders.” It told the company to send it all relevant information, including documents from Rhino-related litigation.

CPSC spent the next few months trying to get Yamaha to comply, at one point complaining to the company that it was sending “duplicative” material and that “the only new item seems to be a Model Year 2009 owner’s manual for the Rhino.”

Only after CPSC subpoenaed Yamaha did the company send to the agency a 70-page written response, a hard drive and 62 DVDs that contained all of the records the company had produced in years of litigation, including company documents that had been subject to protective orders.

CPSC would have known about the Rhino much earlier if Yamaha hadn’t repeatedly violated the rules for notifying the agency of a possible defect, according to William Kitzes, a former adviser to the agency and an expert witness for plaintiffs in Rhino litigation who reviewed correspondence between the regulator and Yamaha.

Companies must report to the agency immediately upon learning that a product is defective or can cause injury or death, or when a product is subject to three or more personal-injury lawsuits in a two-year period that are settled or decided in favor of plaintiffs. From 2004 to late 2008, Yamaha faced about 250 lawsuits alleging that Rhinos were unsafe.

“Certainly no later than, and by many measures well before the end of 2005 … Yamaha had adequate information to report,” Kitzes wrote in a report for plaintiffs.

CPSC didn’t fine Yamaha for failure to report Rhino incidents. The agency and Yamaha jointly announced the Rhino recall on March 31, 2009 – referred to at the time, on Yamaha’s insistence, as a “free repair program.”

In 2011, the Ohio jury hearing Sand’s case found the Rhino defective, but awarded Sand no damages. Ellie was not wearing a helmet when she was killed, and the jury determined that she, her parents and others were negligent in her death.

Yamaha stopped making the vehicles in 2013.

(Additional reporting by Erica Evans and Dan Levine. Edited by Janet Roberts and John Blanton.)

Tyson recalls nearly 40,000 pounds of Weaver chicken patties

FILE PHOTO: Traders gather at the post that trades Tyson Foods on the floor of the New York Stock Exchange June 3, 2014. REUTERS/Brendan McDermid/File Photo

(Reuters) – Tyson Foods Inc is recalling nearly 40,000 pounds of its Weaver chicken patties after some consumers found pieces of rubber in the product, the no. 1 U.S. meat processor said.

The U.S. Department of Agriculture on Thursday classified the recall as Class 1, the strictest form of recall where the use of the product may cause serious health consequences or death.

A Tyson spokeswoman said the company did not know how rubber from machines used for processing the product ended up in the patties and declined to disclose how many customers reported finding the contaminant.

There were no reports of injuries or illnesses associated with the affected product, Tyson said.

The voluntary recall includes 26 oz. bags of Weaver cooked chicken patties produced this January.

The recall comes a little over three months after the company pulled close to 12 million pounds of frozen, ready-to-eat chicken strips from the market over contamination concerns.

(Reporting by Uday Sampath in Bengaluru)

Honda to recall 1.2 million vehicles in North America to replace Takata airbags

The Honda logo is displayed at the 89th Geneva International Motor Show in Geneva, Switzerland March 5, 2019. REUTERS/Pierre Albouy

By David Shepardson

WASHINGTON (Reuters) – Honda Motor Co said on Tuesday it would recall 1.2 million Honda and Acura vehicles in North America to replace defective Takata airbags on the driver’s side.

The company said https://hondanews.com/channels/corporate-recalls/releases/statement-by-american-honda-regarding-recall-of-takata-desiccated-replacement-driver-front-airbag-inflators it was aware of one injury linked to the defect, which may have caused the airbag to rupture when it was deployed in a crash.

Of the 23 total deaths worldwide linked to faulty Takata airbags, 21 have occurred in Honda vehicles.

The National Highway Traffic Safety Administration said the recall covers 1.1 million U.S. vehicles and is to replace inflators received “either as a permanent Takata airbag inflator recall replacement or as a service part installed following a crash or problem with the airbag itself.”

Another 100,000 vehicles are being recalled in Canada, Mexico and Central America, Honda said.

The Honda models being recalled include 2001-2007 and 2009 Honda Accord, 2001-2005 Honda Civic, 2002-2007 and 2010-2011 Honda CR-V, 2003-2011 Honda Element, 2007 Honda Fit, 2002-2004 Honda Odyssey, 2003-2008 Honda Pilot, and 2006-2014 Honda Ridgeline.

The Acura models include 2003 Acura 3.2CL, 2013-2016 Acura ILX, 2003-2006 Acura MDX, 2002-2003 Acura 3.2TL, 2004-2006 and 2009-2014 Acura TL, 2007-2016 Acura RDX, and 2010-2013 Acura ZDX.

More than 290 injuries worldwide have been linked to Takata inflators that could explode, spraying metal shrapnel inside cars and trucks. In total, 19 automakers are recalling more than 100 million potentially faulty inflators worldwide.

Repairs of the recalled Hondas and Acuras will begin immediately in the United States with replacement parts made by alternate suppliers, Honda said.

Honda became aware of the issue after a Honda Odyssey crash, where the front airbag deployed and injured the driver’s arm.

An investigation later showed that manufacturing issues at Takata’s Mexico facility introduced excessive moisture into the inflator during assembly, leading to the problem.

The total number of recalled inflators is now about 21 million in about 12.9 million Honda and Acura vehicles that have been subject to recall for replacing Takata front airbag inflators in the United States, the company said.

Automakers in the United States repaired more than 7.2 million defective Takata air bag inflators in 2018, as companies have ramped up efforts to track down parts in need of replacement.

(Reporting by Sanjana Shivdas in Bengaluru and David Shepardson in Washington; Editing by Shinjini Ganguli and Steve Orlofsky)

Ford recalls 1.48 million F-150 pickups in North America over transmissions

FILE PHOTO: A row of new Ford F-150 pickup trucks are parked for sale at a Ford dealer in the Denver suburb of Broomfield, Colorado, U.S., April 14, 2011. REUTERS/Rick Wilking/File Photo

By David Shepardson and Ben Klayman

WASHINGTON (Reuters) – Ford Motor Co said on Wednesday it was recalling about 1.48 million F-150 pickup trucks in North America due to a potential transmission downshift issue that could increase the risk of a crash.

Ford said select 2011-2013 model year trucks with six-speed automatic transmission could experience an unintended downshift into first gear without warning, which could result in the loss of vehicle control. Ford is aware of five accidents, including one report of whiplash potentially related to the issue.

The recall covers 1.26 million trucks in the United States and 221,000 in Canada. Dealers will update the powertrain control software and the company will notify customers next month.

In March 2016, Ford recalled 153,000 U.S. 2011-2012 Ford F-150, Ford Expedition and Lincoln Navigator vehicles for a similar transmission downshift problem. Ford spokeswoman Monique Brentley said the root cause was different than in the new recall.

In December 2017, the National Highway Traffic Safety Administration opened an investigation into whether that recall should be expanded by nearly 1.4 million 2011-2013 vehicles after 123 complaints and two crashes but no reported injuries.

The agency said an unexpected downshift “can cause the vehicle to slow down suddenly and without warning. This can also cause the rear tires to skid or lock up, increasing the risk of a crash.”

The investigation is pending.

Ford also said it is issuing two other recalls. One covers 28,200 2017-19 Lincoln Continental vehicles in North America for door latches that may not engage due to the buildup of silicon contamination and could result in the door opening while driving.

Ford said it was not aware of any reports of accidents or injuries. Dealers will replace the door latch assemblies in all four doors.

Ford is also recalling 4,200 2019 model Ford Mustang, Lincoln Nautilus and Lincoln Navigator vehicles for instrument panel cluster assemblies that are blank when the vehicles are started. Dealers will update the software. No crashes are reported linked to the recall.

(Reporting by David Shepardson and Ben Klayman; Editing by Chizu Nomiyama and Jeffrey Benkoe)

Toyota recalls 1.7 million vehicles worldwide over air bag inflators

Toyota Motor Corp's logo is pictured on a car in Tokyo, Japan, November 8, 2016. REUTERS/Kim Kyung-Hoon

By David Shepardson

WASHINGTON (Reuters) – Toyota Motor Corp said Wednesday it is recalling another 1.7 million vehicles worldwide for potentially faulty Takata airbag inflators as part of a multi-year industry recall campaign announced in 2016.

Automakers are adding about 10 million vehicle inflators in the United States to what was already the largest-ever recall campaign in history. Last week, Ford Motor Co said it was recalling 953,000 vehicles worldwide for Takata inflators. Previously, 37 million U.S. vehicles with 50 million inflators were recalled and 16.7 million inflators remain to be replaced.

At least 23 deaths worldwide have been linked to the rupturing of faulty Takata air bag inflators, including 15 in the United States.

Toyota’s new recall relates to vehicles from the 2010 through 2015 model years, and includes 1.3 million vehicles in the United States.

More than 290 injuries worldwide have been linked to Takata inflators that could explode, spraying metal shrapnel inside cars and trucks. In total, 19 automakers are recalling more than 100 million potentially faulty inflators worldwide.

To date, 21 deaths have been reported in Honda Motor Co vehicles and two in Ford vehicles. Both automakers have urged some drivers of older vehicles not to drive them until the inflators are replaced.

The defect led Takata to file for bankruptcy protection in June 2017. In April, auto components maker Key Safety Systems completed a $1.6 billion deal to acquire Takata. The merged company, known as Joyson Safety Systems, is a subsidiary of Ningbo Joyson Electronic Corp.

Automakers in the United States repaired more than 7.2 million defective Takata airbag inflators in 2018 as companies ramped up efforts to track down parts in need of replacement, according to a report released last month.

(Reporting by David Shepardson, Editing by Franklin Paul and Bernadette Baum)

Toxin at heart of drug recall shows holes in medical safety net

FILE PHOTO: The headquarters of the European Medicines Agency (EMA), is seen in London, Britain, April 25, 2017. REUTERS/Hannah McKay -/File Photo

By Alexandra Harney and Ben Hirschler

SHANGHAI/LONDON (Reuters) – A toxin inadvertently produced in the manufacture of a widely prescribed medicine but not spotted for years raises questions about regulators’ ability to detect risks in a sprawling global drug supply chain increasingly reliant on factories in China.

China’s Zhejiang Huahai Pharmaceutical, which produces bulk ingredients for drugmakers, told its customers in late June it had found NDMA in its valsartan, an off-patent blood pressure drug originally developed by Novartis.

The discovery means that some of the 10 billion pills containing valsartan sold worldwide last year to prevent heart attacks and strokes had traces of N-nitrosodimethylamine (NDMA), classified as a probable human carcinogen. No one has been reported as sickened by the toxin, once used in the production of liquid rocket fuel.

Regulators and industry experts say the toxin almost certainly was introduced when Huahai changed the way it produced valsartan in 2012 – a modification that was signed off on by the European body that sets standards. Subsequent inspections by European, U.S., and Chinese regulators also found no problem.

“Everyone failed – the company, the inspectors, the FDA (U.S. Food and Drug Administration), the Europeans, the Chinese,” said Philippe André, an independent pharmaceutical auditor who inspected two Huahai facilities last August and found no critical concerns. “It’s a system failure.”

Reuters was unable to determine how Huahai first discovered the problem. In a July 7 statement released through the Shanghai Stock Exchange, it said it detected the toxin during the “optimization and evaluation” of its manufacturing process.

A Novartis spokesman told Reuters that its generic drugs arm, Sandoz, spotted the NDMA in the course of intensive testing to prepare for expanding its purchases of valsartan. He declined to comment further, including on the identity of the manufacturer or when the tests took place.

Two other smaller bulk suppliers – Zhejiang Tianyu Pharmaceutical and a unit of India’s Hetero Drugs – have since also discovered traces of NDMA in some of their valsartan.

The three companies declined to comment to comment about the case.

REDUCE WASTE

Huahai said in a document released through the Shanghai Stock Exchange it changed the production process to reduce waste and improve yields.

“The NDMA impurity was produced in trace amounts during the normal manufacturing process according to the company’s current registered process,” it said in a statement on July 24.

“All changes in the company’s valsartan manufacturing process have been approved by each country’s drug regulator, and the company manufactures in compliance with legal and regulatory standards.”

The European Medicines Agency (EMA) regulator, which first publicly raised the alarm in a statement on July 5, told valsartan suppliers in a subsequent memo dated July 16 that the NDMA may have been connected to the combined use of the solvent dimethylformamide and sodium nitrite.

The FDA is also going on that hypothesis, said Janet Woodcock, director of its Center for Drug Evaluation and Research. She stressed the investigation was still going on.

“This (NDMA) was not what you look for in an inspection,” Woodcock said in an interview. “If you don’t test for this you’re not going to have an idea that it’s in there, and you’re not going to see it on an inspection.”

The European Directorate for the Quality of Medicines (EDQM), responsible for setting manufacturing standards, told Reuters it was aware the solvent was being used when it approved the changed process, but that NDMA as a by-product was unexpected and not tested for.

Detecting NDMA would have required gas chromatography coupled with mass spectrometry, a very sensitive level of testing, an EDQM spokeswoman said.

“These techniques are not normally used routinely to test pharmaceutical products,” she said.

RECALLS

Built by Novartis into the $6 billion-a-year brand Diovan, valsartan’s European and U.S. patents expired in 2011 and 2012.

Global sales totaled 10.4 billion pills last year, including combination products, healthcare data consultancy IQVIA estimates. People with high blood pressure typically take one pill daily and heart failure patients two.

More than 50 companies around the world making finished tablets from the tainted valsartan have recalled products in recent weeks, according to a Reuters analysis of national medicines agencies’ records. They include major generic drug manufacturers such as Teva Pharmaceutical Industries, Ranbaxy Laboratories, and Sandoz.

Based on the average NDMA impurity detected at Huahai of 60 parts per million (ppm), the EMA says there could be one additional case of cancer in every 5,000 people taking the highest dose for seven years.

The contamination puts a spotlight on manufacturers in China and India, which supply more than two-thirds of all active pharmaceutical ingredients used in medicines, industry executives estimate. China accounts for the lion’s share.

Huahai, founded in 1989 and listed in Shanghai in 2003, was one of the first Chinese companies to get drugs approved in the U.S. market.

The FDA has inspected the site that made the contaminated valsartan three times since 2010, its records show. European inspectors also visited regularly.

The provincial branch of the Chinese FDA (CFDA) also inspected Huahai facilities 10 times in connection with new drug applications between January 2016 and June 2018, the national online database shows.

SCRUTINY

U.S. and European regulators have increased scrutiny of Chinese and Indian drug factories after the adulteration of the blood thinner heparin sickened hundreds and caused the deaths of at least 81 Americans in 2007 and 2008.

The CFDA is also on alert.

Last month, it revealed that Changsheng Bio-technology , a vaccine maker, had fabricated data and sold ineffective vaccines for children. It also found that a diphtheria, tetanus and pertussis vaccine sold by the state-owned Wuhan Institute of Biological Products was substandard.

The fact that international inspections do not appear to have detected the NDMA contamination alarms Anders Fuglsang, a former European medicines regulator who runs a pharmaceutical consultancy in Denmark.

“We need to ask ourselves how it is possible – despite pharmacopoeias and agency guidelines, inspection programs with coordination across continents, a system of public quality control, and companies complying with all rules – that a nasty carcinogen can find its way into our drugs and be there for years without anyone noticing,” he said.

(Additional reporting by Shanghai newsroom, Zeba Siddiqui in Mumbai and Sharnya G in Bengaluru; Editing by Sonya Hepinstall)

Toyota expands U.S. Takata air bag recall to 600,000 extra vehicles

The Toyota logo is shown at the Los Angeles Auto Show in Los Angeles, California, U.S., November 30, 2017.

By David Shepardson

WASHINGTON (Reuters) – Toyota Motor Corp said on Tuesday it was expanding its safety recall involving Takata Corp front passenger air bag inflators to cover about 601,300 additional vehicles in the United States.

Takata and its U.S. entity TK Holdings Inc filed for bankruptcy in June after it said it was recalling more than 100 million of its air bag inflators worldwide through the end of 2019 because they could inflate with too much force and spray metal fragments.

Air bags with the inflators have been linked to at least 180 injuries and 20 deaths, mostly in the United States including one in Louisiana that was identified last month.

The U.S. National Highway Traffic Safety Administration on Saturday posted a notice from Takata that said the company would recall another 3.3 million inflators for vehicles from automakers including Toyota, Honda Motor Co, BMW AG, Daimler AG, General Motors Co, Tata Motors Jaguar Land Rover unit and Subaru Corp.

NHTSA said in November that 19 automakers had recalled 46 million inflators in 34 million U.S. vehicles — and by 2019 as many as 70 million U.S. inflators will have been recalled. In June, the agency said only about 35 percent of vehicles recalled have been repaired to date.

In January 2016, Takata agreed to plead guilty to criminal wrongdoing and pay $1 billion to resolve a U.S. Justice Department investigation into the inflator ruptures.

(Reporting by David Shepardson in Washington and Sanjana Shivdas in Bengaluru; Editing by Tom Brown)

Ford to recall about 1.3 million vehicles in North America

FILE PHOTO: An airplane flies above a Ford logo in Colma, California, U.S., October 3, 2017. REUTERS/Stephen Lam

(Reuters) – Ford Motor Co said on Wednesday it would recall about 1.3 million vehicles in North America, including certain 2015-17 Ford F-150 and 2017 Ford Super Duty trucks, to add water shields to side door latches. (http://ford.to/2ySvCBJ)

The No.2 U.S. automaker said the safety recall is due to frozen door latch or a bent or kinked actuation cable in the affected vehicles, that may result in a door not opening or closing.

The company said it was not aware of any accidents or injuries associated with the issue but said because of the fault the door may appear closed, increasing the risk of the door opening while driving.

The cost of the recall was estimated to be $267 million and would be reflected in its fourth quarter results, the company said. (http://bit.ly/2yT3EWu)

Ford said it continues to expect full-year adjusted earnings in the range of $1.65 to $1.85‍​ per share.

(Reporting by Ankit Ajmera in Bengaluru; Editing by Anil D’Silva and Arun Koyyur)

IKEA recalls 36 million chests and dressers after six deaths

Flags and the company's logo are seen outside of an IKEA Group store in Spreitenbach

WASHINGTON (Reuters) – Swedish furniture company IKEA Group [IKEA.UL] is recalling almost 36 million chests and dressers in the United States and Canada but said the products linked to the deaths of six children are safe when anchored to walls as instructed.

The recall covers six models of MALM chests or dressers manufactured from 2002 to 2016 and about 100 other families of chests or dressers that the U.S. Consumer Product Safety Commission said could topple over if not anchored securely to walls, posing a threat to children.

“It is simply too dangerous to have the recalled furniture in your home unanchored, especially if you have young children,” CPSC Chairman Elliott Kaye said in a statement on Tuesday.

Tipped-over furniture or television sets kill a U.S. child every two weeks, he added.

IKEA said that the recall was based on a standard applicable in North America for free-standing clothing storage units and that the products meet all mandatory stability requirements in Europe and other parts of the world.

“When attached to a wall the products are safe. We have had no other issues with that in any other country,” said Kajsa Johansson, a spokeswoman for IKEA in Sweden.

IKEA said it had no details on potential costs stemming from the recall.

A recall summary from the company said that the chests and dressers are unstable if not properly anchored to a wall, posing a serious tip-over and entrapment hazard that could result in death or injury to children.

Two U.S. toddlers died in separate 2014 incidents when MALM chests fell on them. A 22-month-old boy was killed last year in a similar incident, which occurred after IKEA had announced a repair program including a free wall-anchoring kit.

None of the furnishings in the fatal incidents had been anchored to a wall.

IKEA had received reports of 41 tip-over incidents involving non-MALM chests that caused 19 injuries and the deaths of three children from 1989 to 2007.

As part of the recall, IKEA is offering refunds or a free wall-anchoring kit.

The U.S. recall covers about 8 million MALM chests and dressers and 21 million other models of chests and dressers. About 6.6 million are being recalled in Canada.

Ikea has sold approximately 147.4 million chests of drawers globally since 1998.

(Reporting by Ian Simpson in Washington DC and Mia Shanley in Stockholm; Editing by Dan Grebler and David Goodman)

FDA too slow to order food recalls, U.S. watchdog finds

FDA HQ in Maryland

By Julie Steenhuysen

CHICAGO (Reuters) – The Food and Drug Administration is too slow to order companies to recall tainted foods, leaving people at risk of illness and death, a government watchdog said in a review of the agency’s food safety program.

The Department of Health and Human Services’ Office of Inspector General reviewed 30 recalls that occurred between 2012 and 2015, including two in which companies did not recall all affected items until 165 days and 81 days after the FDA became aware of tainted foods. The watchdog issued its report on Wednesday.

“FDA does not have adequate policies and procedures to ensure that firms take prompt and effective action in initiating voluntary food recalls,” the report said. “As a result, consumers remained at risk of illness or death for several weeks after FDA was aware of a potentially hazardous food in the supply chain.”

The watchdog urged the FDA to address the problem immediately.

In a blog post, FDA food safety officials Stephen Ostroff and Howard Sklamberg called the report’s findings “unacceptable” and said the agency is “totally committed” to food safety.

Representative Rosa DeLauro of Connecticut in a statement said it was “mind-boggling” that the FDA does not have policies or procedures to ensure swift voluntary food recalls.

DeLauro, who oversees drug and food safety in her position on the House of Representatives subcommittee responsible for the FDA, pointed to a salmonella outbreak last year in cucumbers, which sickened nearly 900 people, hospitalized 191 and killed six. The outbreak began in July, but it took until September before producers started recalling product.

“Delays like this one – and others found in the report – are completely unacceptable and leave American consumers at risk for illness and death,” DeLauro said.

Ostroff and Sklamberg said the FDA has a plan underway to strengthen compliance and enforcement policies, including both voluntary and mandatory recalls.

But they said recalls must be based on scientific evidence borne out of an outbreak investigation. And while timeframes for recalls need to be set, “they must be done on an individual basis rather than by setting arbitrary deadlines.”

To speed the FDA’s response, Ostroff and Sklamberg said the agency has established a team of experts from different scientific disciplines to oversee outbreak investigations. They also cited FDA’s adoption in 2014 of the use of whole genome sequencing, a more precise technology for determining the genetic fingerprint of foodborne pathogens.

In addition, provisions in the 2011 Food Safety Modernization Act that require companies to minimize food safety risks, and require companies to have a recall plan, will begin to take effect this fall.

(Reporting by Julie Steenhuysen; Editing by Leslie Adler)