Medical Device Link.

Originally Published MX July/August 2005

COVER STORY

Abbott is one of the big-seven companies in the in vitro diagnostics (IVD) sector of the medical device industry and a global leader in the field of immunoassay testing. But in November 1999 Abbott's diagnostics business ran into some significant challenges.

That month, Abbott signed a consent decree because of ongoing issues regarding FDA's quality systems regulation at its plant in Lake County, IL. In addition, the company agreed to cease production of a significant number of assays manufactured at the plant.

It took several years, but Abbott managed to get its diagnostics business back on track. At the beginning of 2004, FDA cleared the Lake County facility to produce some of the previously stopped assays, gradually permitting the facility to return to normal operations.

Dealing with such problems would have forced most IVD manufacturers to close up shop. But with the help of Abbott's financial and scientific resources, company leaders are restoring the diagnostics business unit to healthier growth. In comments below, Rick Gonzalez, president and chief operating officer of the company's medical products division, discusses some of the lessons Abbott learned from this experience, and what the company expects from its diagnostics business in the future.

MX: You ran Abbott's diagnostics business for a while. Although that unit has had troubles in the past, it has emerged from them. Can you comment on what happened, what Abbott has learned in trying to recover from those issues, and the current status of that recovery?

Rick Gonzalez: Looking at the diagnostics business historically, particularly the immunochemistry side of it, we were the pioneers. We developed that market from the very early days of the first radioimmunoassays, and we developed the market in the hepatitis area. We were the pioneers in bringing fluorescence polarization to the market with TDx and then, ultimately, technologies like IMx and AxSym, which is still the world's largest instrument platform for immunoassay testing. We were always recognized as a company that delivered very high quality products in that market. We are the clear market leaders in these areas.

Even today, we are two-and-one-half times larger than any other player in the immunochemistry market. And we are the largest player in the traditional laboratory market of immunoassays, clinical chemistries, and hematology, with a 20% worldwide share, the next-closest company being Roche. So we still operate with a very strong position in that marketplace.

So the company's strength and reputation enabled it to weather the crisis with limited damage?

Our customers, particularly in the United States, have been very loyal throughout our Lake County manufacturing situation, and we appreciate that.

The main challenges we faced in this area were the size and complexity of our Lake County diagnostic manufacturing operation. This was a single site supplying almost 30% of the worldwide immunoassay needs. That became increasingly difficult for us to manage with changes occurring in quality system regulations. Working closely with FDA, we have implemented a stronger yet more simplified quality system, which has allowed us to operate this facility more effectively.

Also, as part of the process, we have reduced complexity in that particular facility. We have started up manufacturing operations outside the United States, in the United Kingdom and Ireland, to handle all of our ex-U.S. requirements. Over a couple of years we will transfer most of the non-U.S. manufacturing to those facilities, which will bring down the scope of the Lake County facility to half, or maybe a little less than half, the size it is today, which will help from a size and complexity standpoint.

In what other ways has the recovery changed the company's thinking?

We learned about different perspectives for trying to approach the quality system regulation, understanding that it is a continuous process. This process also reinforced the importance of continually advancing our good manufacturing practices (GMP) quality system. As a result, we have reduced the complexity of the facility and made strides in continually advancing our GMP quality system. I think those were the two keys in meeting the expectations of the agency.

A lot of products never really were affected by the consent decree, and you kept an eagle eye on the production of those things that continued. Now that the company is recovering, are some discontinued products coming back on line? Is everything back now?

One of our goals was to rapidly increase the menu, particularly in the United States, on both AxSym and Architect. I have been very pleased with the progress that the unit has made over the last year and a half or so since we were found to be in conformity. For example, we launched about 80 new products last year and are on track this year to launch a little over 100 more. So we are filling out the menu at a very good pace.

That is helpful to our customers because one of the important things in this field is workstation consolidation. The more assays you can have on a system or a platform, the more appealing it is to customers both in the United States and in foreign markets. That was a high priority, and we are making good progress in that area.

Did your customers follow you through the process? Was there much customer loss?

Our customers, I would have to say, were incredibly patient and loyal, which we certainly appreciate. I think that is a tribute to both the products and the organization, as well as to the loyalty that customers have to this product and to the division.

As we have expanded the menu, our business has improved steadily. We plan on launching some new systems as well over the course of the next 12 to 18 months that I think will only accelerate the pace of growth. We will launch three new hematology systems this year and some additional automation in this area. That will be very helpful.

Copyright ©2005 MX