Recalls Prompt FDA Inspection, Production Shutdown

Quality issues at Zimmer Holdings’ surgical support accessories plant in Dover, Ohio, has forced the company to halt production at the site, costing an estimated $70 million to $80 million in lost revenue for 2008.

During the firm’s first quarter earnings call in late April, Zimmer Chief Financial Officer Jim Crines said the shutdown cost the company $6.5 million in lost sales during the quarter.

The shutdown came after Zimmer initiated large-scale recalls of some surgical accessories, which prompted an FDA inspection that found manufacturing deficiencies, CEO David Dvorak said.

“Anytime you make a recall, there is likely to be an FDA inspection,” he added. “There was an inspection. There were some observations. We had a third party come in and essentially do a wall-to-wall review and as a consequence, … we identified some specific actions we want to take.

“The actions that we were taking both at the end of March and into the beginning of April included notifying customers [and] explaining to employees what we were doing to ensure that the quality systems were at the level that was consistent with our standards.”

Dvorak said no FDA warning letters were pending, and operations at the firm’s other facilities were not affected. The same consultant who conducted the review of the quality systems at the Dover facility also audited operations at the company’s core implant-manufacturing sites, and Zimmer is comfortable with those quality control systems.