Terumo unit enters consent decree, gives up $35M in profits

A U.S. unit of Tokyo-based Terumo has agreed to the terms of a consent decree with the FDA regarding quality system improvements at an Ann Arbor, MI facility. Terumo Cardiovascular Systems also has agreed to pay the federal government $35 million in disgorgement of profits from past sales. The agreement is subject to the approval of the U.S. District Court for the Eastern District of Michigan.  

During an inspection of Terumo's Ann Arbor facility from January through March 2010, FDA investigators saw numerous cGMP and MDR violations. The agency had twice warned the company about its cGMP problems, issuing warning letters to the company in 2004 and in 2006, according to an FDA statement.

Under the terms of the agreement, Terumo CVS will create a work plan to resolve the observations. However, until the plan is complete, the company will restrict the distribution of certain products manufactured at the plant to existing customers who deem the products medically necessary, according to a Terumo release. Products manufactured at the plant include heart-lung machines and cannulae, and other related products used in cardiac surgery.

Terumo CVS President and CEO Mark Sutter said in a statement that his company is committed to resolving the FDA's concerns. "Over the past year, Terumo CVS had already begun implementing a significant quality system initiative that will create systemic, sustainable improvements in its Quality Systems," he adds. 

According to AnnArbor.com, the company doesn't believe job cuts are likely. "We currently believe that we'll get through the work plan for the consent decree without the loss of jobs," Barbara Schmid, Terumo CVS' director of corporate communications, said in an interview. "We have totally committed to staying in the Ann Arbor area through all of this in case anyone thought there was a chance that we would be leaving the area or diminishing our capacity in the area."

AnnArbor.com also points out that Terumo has been held up by the Michigan Economic Development Corp., Ann Arbor SPARK and industry leaders as an example of the region's medical device prowess. In 2009, its two Scio Township divisions wrapped up a $3.6 million expansion that included 60 new jobs over an 18-month stretch.

- get the Terumo release
- see the FDA's statement
- check out the AnnArbor.com story

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