The plant, in South Pasadena, Calif., is part of the company’s diagnostics business and will close some time in the next couple years. Other diagnostics manufacturing jobs will be affected in Santa Clara, Calif., and Lake County, Ill., a company spokeswoman told Dow Jones. In all, the company plans to cut about 1,000 in its diagnostics business.

This move puts Abbott in good company: Since last summer, Merck, Wyeth, Bristol-Myers Squibb, Johnson & Johnson and Amgen have all announced plans to cut jobs.

Most are a pretty thin gruel of citations from the Code of Federal Regulations and observations by FDA inspectors that a company failed to validate this or calibrate that on the production line.

But those letters don’t hold a candle to this riveting warning letter about unsanitary conditions at Capitol Cake, a Baltimore bakery specializing in fruitcake and pound cake.

The company brags that its Shirley Jean Fruitcake has been on every Space Shuttle in earth orbit at Christmas since 1994. But back on earth, the cake maker’s warehouse was swarming with vermin, according to the FDA.

The FDA’s recently released letter to Capitol Cake President John Kunkel said agency inspectors found ample evidence of a lack of pest control, including:

[L]ive rodents observed along side a rodent trap, running under pallets containing finished food products and collapsed boxes used by your firm, and a live rodent that you brushed off of your shoulder onto the floor, and then kicked under a pallet holding finished food products

Some other signs of trouble were a bird flying around inside the warehouse, dead rodents on a rack with finished baked goods and “rodent excreta pellets” (REPs to FDA) that seemed to be all over the place.

We called Kunkel at Capitol Cake, and he told us the FDA letter made the situation sound worse than it was. “A mouse did run out over my foot. He didn’t jump off my shoulder,” he said. As for the bird, it “flew in and then out in five minutes,” he said. That wouldn’t usually happen, but “the front garage was open only because we were doing the cleaning” to remedy the rodent situation.

Kunkel doesn’t dispute that there were some mice running around in the company warehouse during FDA’s inspection in May, mostly in some old packaging material and leftover fruitcake ingredients from previous seasons.

But after the FDA inspection, he shut the warehouse and bakery down for almost two weeks and everything “was wiped down and wiped clean.” The company also sealed holes in the warehouse walls and floor that may have been letting mice in.

There hasn’t been a mouse seen since the fixes, Kunkel said, and subsequent inspections, including one by AIB International bakery auditors, have been up to snuff. “We had some mice and I’m glad we caught it when we did,” he said.

Photo: iStockphoto

This time the setback was dealt to Johnson & Johnson’s intravenous antibiotic drug Doribax. The agency says it needs more information before it can decide on the use of Doribax to treat the nasty kind of pneumonia patients pick up in hospitals. FDA approved Doribax last year for treatment of serious abdominal and urinary tract infections.

Although not obligated to follow the recommendations of advisory committees, FDA historically has done so. But in early August, it decided to reject Schering-Plough’s sugammadex, even though the committee decided unanimously to approve it. A week later, the FDA said it needed three more months before coming to a decision about J&J’s psoriasis medicine, ustekinumab, despite another advisory committee’s unanimous vote for approval.

“Usually you would expect the FDA to agree with its panels, but isn’t hasn’t been quite doing that,” Mike Krensavage of Krensavage Asset Management told the Health Blog. “I think it’s another sign that the FDA is being increasingly cautious about approving new drugs.”

At least in the case of Doribax, the outside experts’ decision was mixed. Panel members voted 7 to 6 that the drug was efficacious for hospital-acquired pneumonia and also in a split decision that it was safe. Some questioned the company on aspects of the study design.

J&J says in a statement that it “is reviewing the agency’s letter and will work to resolve any outstanding questions.”

GlaxoSmithKline said today that starting next year it will issue quarterly reports on its grants to “various organizations including hospitals, teaching institutions, managed care organizations, professional associations, patient advocacy groups, and continuing medical education companies.”

These sorts of grants add up. Eli Lilly, among the first to start reporting this stuff, said last spring that it had given out nearly $12 million in the first three months of 2007 to groups both large (the American Medical Association) and small (the Central Indiana Association of Pharmacists).

Sen. Chuck Grassley (R-Iowa) has been leaning on drug and device companies to be more open about who they give money to.

Earlier this year, Boston Scientific told Grassley it’s developing a system that will disclose multiple categories of payments, including some to physicians; Medtronic and AstraZeneca both said they planned to start posting payments for professional meetings and patient groups; Merck said it’s working on a plan; and Amgen and Abbott said they’re working to figure out how to compile and display their grants. For more, see this AP story from April.

Photo: iStockphoto

Case in point: Medicare directed an outside auditor to use improper methods to inflate the effects of the agency’s battle against fraud, according to a draft inspector general’s report cited by this morning’s New York Times.

In an audit of durable medical equipment claims (a fraudster favorite), Medicare reportedly told the auditor only to examine the documents submitted by the companies selling the equipment. But auditors are also supposed to randomly select some claims for a deeper dive, to review the underlying medical records and see whether the claim is medically justified.

The limited audit found that 7.5% of claims paid by Medicare were inappropriate. But the draft report, from the inspector general of Health and Human Services, found that the actual error rate was closer to 31.5%, the NYT says.

Twentysomethings make up a disproportionate percentage of the nation’s uninsured — in part because they feel invincible, but also because of other factors, such as job hopping and working part-time jobs that don’t offer insurance benefits.

At the same time, they’re pretty cheap to insure because they tend to be healthy. So lots of states have been enacting laws like the one in Illinois that require insurers to give parents the option of covering their kids well into their 20s. The Trib says such laws have already been implemented or will soon be put in place in 20 states.

Blue Cross and Blue Shield of Illinois, the state’s largest insurer, said the new law would add 1% to the cost of the average group benefit plan. Companies that self-insure answer to the federal government, so the new law doesn’t apply to them.

But the federal rules, too, could soon shift in this direction. Barack Obama has said that families should have the option of covering kids on the parents’ plan until age 25.

Photo by Wm Jas via Flickr

A 16-year-old boy with a terminal illness wants access to an experimental drug called PTC124. The company making the drug says the boy is not an appropriate candidate for the drug. What is to be done?

A federal judge in New Jersey said yesterday that PTC Therapeutics should give the drug to Jacob Gunvalson, who has a rare disease called duchenne muscular dystrophy, the Associated Press reports.

We’ve heard of cases like this before. Last year, we wrote of a 4-year-old girl with a form of cancer called neuroblastoma whose father sought out a small biotech company with a drug that had been tested on only six people. The company didn’t want to give the drug to the girl.

The natural initial response to cases such as these is pretty clear: Just give the kid the medicine. But on reflection, it gets murkier.

For a drug to save or improve lives on a large scale, it needs to be proven effective in clinical trials. Forcing a company to give a drug to patients who want it — even if the company believes those patients may not be the best candidates — can derail a drug’s chances of winning approval, harming patients in the long run.

Assuming the vaccine provides lifelong immunity, vaccinating girls at age 12 costs $43,600 per quality-adjusted life-year (QALY) gained — a figure the authors, from Harvard’s School of Public Health, call “economically attractive.”

But the cost per QALY goes up significantly for vaccinating older girls and women, who are more likely to be infected already with HPV, the sexually transmitted virus that can cause cervical cancer.

The vaccine was introduced only two years ago; a temporary catch-up program to vaccinate girls up to age 18 would cost $97,300 per QALY, and extending vaccination to age 26 costs $152,700 per QALY, the analysis found. A Merck researcher told Dow Jones Newswires that the company’s estimates put the cost at less than $50,000 per QALY for women up to age 26.

(QALY, a standard metric used to analyze cost-effectiveness of medical interventions, is explained here.)

Likewise, the vaccine becomes less cost-effective if vaccine-induced immunity wears off after, say, 10 years.

Merck and Schering-Plough, which jointly market the medicine, delayed their second-quarter earnings announcements so that scientists involved in analyzing the data could present the information publicly. They concluded that Vytorin doesn’t really increase cancer risk. Not everyone is so sure, including Rep. John Dingell, who asked to see how the researchers decided that Vytorin was safe.

Investors fretted that even though the cancer data weren’t that scary to the experts, the public might be alarmed by press coverage of the complex issue. Sanford Bernstein’s Tim Anderson wrote that the immediate drop in the companies’ stock prices reflected worries “about how press headlines about the cancer finding might impact prescribing trends.”

Our colleagues at Dow Jones Insight, who track press coverage, took a look at Vytorin mentions over the last year. There was a huge spike in coverage of Vytorin to 512 stories during the week starting July 21. But, as the chart above shows, the attention was short-lived, and even at its peak the coverage was less intense than the jump at the end of March when disappointing data from the Enhance trial were presented at a meeting of the American College of Cardiology.

New prescriptions for Vytorin in the US have held steady at more than 80,000 a week over the last month, according to data from Wolters Kluwer Health. And investors seem to have recovered from the initial shock. After falling to a low of $17.95 the day after the cancer data were released, Schering-Plough shares closed at $20.46 today. Merck hit a low of $31.15 the day after the came out, and closed at $34.94 today.

The hospital says his immediate family consents to returning him to his home country, but Pantaleon’s sister and cousin have retained a lawyer to fight the hospital. The Chicago Tribune has the story.

The practice of hospital deporting immigrants has been in the public eye lately — the New York Times had a big piece on the subject earlier this month.

Hospitals are obliged to arrange for patients’ post-hospital care, and Medicaid doesn’t cover long-term care for illegal immigrants.

“It’s important to make sure that hospitals aren’t permitted to dump patients on an international level when they can’t do it on a local level,” a lawyer working with Pantaleon’s sister and cousin told the Trib.

Pantaleon, who has been in this country for 11 years, is uninsured and was working at a carwash, the article says. Officials at the hospital say he’s unlikely to recover from his coma, and they’ve arranged to transfer him to a hospital in Acapulco, Mexico.

“We can’t arrange long-term care here, so we try to do the best we can in the country of origin,” the hospital’s chief medical officer at told the Trib.

Photo: iStockphoto