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UPDATED: GSK lawsuit shows risks of vaccine outsourcing

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The market for contract manufacturing of vaccines is predicted to swell to $620 million by 2015 as Big Pharma ups outsourcing. But the shift carries risks, as GlaxoSmithKline showed when it filed a lawsuit last week.

GlaxoSmithKline ($GSK) is suing Hospira ($HSP) over a vaccine deal gone bad. In 2010 Hospira signed up to supply GSK with influenza vaccines for the U.S. market, but the relationship quickly turned sour, Bloomberg reports. GSK alleges Hospira canceled the 5-year deal on March 22, 2012 after failing to meet quality standards. Almost exactly one month earlier, the World Health Organization (WHO) launched its recommended influenza virus vaccines for the coming winter.

The annual WHO release marks the start of the seasonal flu manufacturing process in the northern hemisphere. GSK claims that, having lost its manufacturing partner, it "sustained substantial damages," which it is now trying to recoup in court. The lawsuit calls for Hospira to pay $25 million in damages plus legal fees and interest. A spokesperson for Hospira declined to comment on the lawsuit to Bloomberg.

Quality problems dogged Hospira for the duration of the contract with GSK. In April 2010 Hospira received an FDA warning letter for failings at two plants in North Carolina, the fallout from which it is still dealing with today. Hospira has since faced lawsuits from investors, patients and now GSK. By the time the contract was canceled, shares in Hospira were down more than one-fifth on the start of 2010 and investor chatter about a consent decree was intensifying. In response, Hospira has invested heavily in remediation but recalls and FDA Form 483s have continued to mount up.

While Hospira lost the GSK contract, it has won other vaccine business. FDA approval of Protein Sciences' influenza vaccine, Flublok, gave Hospira a filling, packaging and labeling contract for its McPherson, KS, facility. McPherson was responsible for overfilled syringes in 2012--and also received an FDA Form 483--but investments have reportedly helped the plant. Hospira CEO F. Michael Ball declared remediation efforts at the site as being on track in November after FDA inspectors made two observations during a visit.

- check out the Bloomberg article
- read FiercePharma Manufacturing's take

Related Articles:
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Protein Sciences nabs Flublok approval

Editor's note: This story has been updated to include data on the vaccine outsourcing market.

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