Fresenius focuses on data, computer lapses at Akorn in trial over $4.3B deal


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A trial which will determine whether Germany’s Fresenius can cancel its $4.3 billion deal to buy out U.S. generics maker Akorn is focused on lapses in Akorn’s computer and data integrity. Fresenius says it is justified in killing the deal, while Akorn counters that Fresenius has buyer’s remorse, adding that the concerns are small deals and common among drugmakers and third-world companies.

Citing a lawyer for Fresenius, Bloomberg reported that experts Akorn brought in after the computer issues were uncovered by the FDA both testified in this week’s trial that Akorn had almost no oversight. According to lawyer Lewis Clayton, Akorn consultant John Avellanet, testified “anyone in the company could get into that system and modify the records with no accountability.”

RELATED: Fresenius’ $4.3B buyout of Akorn threatened by data integrity probe

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Zena Kaufman, a former head of quality control at Hospira and another Akorn consultant, testified the computer security problems were the worst she had ever seen, Bloomberg reported. There was testimony that Akorn tried to cover up the lapses.

The FDA has been carefully monitoring computer and data security and audit trails at drugmakers for a decade since it uncovered problems at Ranbaxy Laboratories, once the largest Indian generics maker and a key supplier to the U.S. The FDA was criticized at the time for being unaware of the Ranbaxy data manipulations until a whistleblower from the company came forward.

Since then, the FDA has been on the alert and found computer security and data manipulation has been common at some companies, generally foreign owned, but not always.

RELATED: Fresenius oncology drug plant slammed with new warning letter

An Indian plant owned by Mylan was cited, as was a Fresenius plant in India, which was savaged with a warning letter in 2013 after FDA investigators found that employees had actually been removing computer equipment from the plant ahead of a FDA inspections to hide data manipulation.

While the trial will determine if Fresenius can cancel its deal, some analysts think it will still get done but at a much reduced price.

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