Pan Pharmaceuticals Limited.

1. Pan Pharmaceuticals Limited. Prosecution of Travacalm

2. Pan Pharmaceuticals Limited (‘Pan’) was a major Australian drug manufacturing company listed as a public company on the Australian Stock Exchange since April 2001.

3. Pan was responsible for the manufacture of complementary health care products. Among the products that it manufactured was Travacalm, a travel sickness product, a formulation that included a small dose of a critical active ingredient hyoscine hydrobromide.

5. Any medication with small doses of active ingredient is known as a micro-dose product. Because the active ingredient is a small proportion of the overall product, an even distribution of the active ingredient is critical, both as a matter of manufacturing method and as a matter of quality control and product testing.

6. If an even distribution of the active ingredient does not take place, then parts of the product would have higher than prescribed doses and parts of the product would have lower than prescribed doses.

7. The accepted method of producing micro-dose products is known as wet granulation, which involves dissolving the active ingredient in solution to ensure equal distribution throughout a production batch.

8. Wet granulation manufacturing is generally more expensive than dry mix manufacturing because of the additional time and resources required to dry the product.

9. Pan’s use of a dry mix method contributed to the result of not giving an even distribution of hyoscine hydrobromide. The distribution was such that in one batch manufactured in particular the dosage level varied from 0% hyoscine hydrobromide to 700% of the proper dose.

10. This had disastrous results when used by consumers, with some ending up in intensive care. Pan only manufactured six batches of Travacalm with hyoscine hydrobromide, the first five were released on the market.

11. Part of the manufacturing process included testing of samples of Travacalm. Those tests included measuring the concentrations of the active ingredient during manufacture using a high performance liquid chromatography (HPLC) computer.

14. Those tests were defective by reason of methodology – too large a manufacturing test samples, concealing poor distribution of hyoscine hydrobromide and falsification of batch test results by data manipulation.

15. Those false test results were contained in the manufacturing records of Pan for each batch, known as batch records. This led to the packaging on the finished product being wrong. If the dose was the same as indicated in the packaging that was purely a matter of chance, with most tablets being over or under the specified dose.

16. The Pan manufactured product reached the market in the second half of 2002. The Therapeutic Goods Administration (TGA) received the first adverse reaction reports in mid January 2003. The number and nature of the reports led to the TGA ordering a consumer level recall of 3 original batches of Travacalm on 20 January 2003.

17. In the period from January 2003 to April 2003 the TGA conducted an audit of the manufacturing processes of Pan. The audit uncovered critical deficiencies in the manufacturing processes, falsification of analysis, destruction of documents and breaches of Good Manufacturing Practice (GMP).

18. An investigation into these practices was underway and concerned false representation as to the strength of the hyoscine hydrobromide in each of the five batches of Travacalm that was released onto the market by Pan being representations contained:-

19. in the five sets of batch records for the five batches of Travacalm manufactured by Pan that were released on the market; and • consequentially on labels on packets for those five batches.

20. The Chemical Analyst was the person who manipulated the data in the test results, conducted the tests and who altered the results to make each batch of Travacalm appear compliant as to the uniformity of content requirement and thus dose of hyoscine hydrobromide.

21. The Chemical Analysts role is apparent on the face of the test results themselves, being their own recording of the work that they were performing, but is also supported by evidence from a range of witnesses and other evidence pinpointing them as the person responsible for conducting the testing and therefore manipulating the results.

22. Pan was charged with the principal offences as it was the legal person who engaged in the proscribed dealing in counterfeit therapeutic goods, and the analyst is charged with the accessory offence of aiding Pan.

23. The evidence disclosed that Pan was focused on productivity and profit, rather than attention to production and safety standards. The company was therefore culpable for the fault elements of the offences charged against Pan via their conduct and via the corporate culture they presided over, as well as by the conduct of the Chemical Analyst.

24. Detection of the data manipulation by Pan and notification to management.

25. In early January 2003, the Quality Assurance (QA) Manager of Pan was contacted by the QA Manager of Key (sponsor of Travacalm). The QA Manager of Key informed the QA Manager of Pan they had been contacted by the TGA about batch number 78586 of Travacalm.

26. It was requested for the batch to be investigated from the Pan end. As a result the QA Manager of Pan asked the Chemical Analyst to do a further analysis of the retention sample of batch 78586.

27. The re-testing results provided by the analyst were the same as provided in the bundle of manufacturing and test records assembled by Pan for each batch manufactured, known as batch records.

28. The QA Manager considered that this did not accord with what was happening and requested a second analyst to analyse the retention sample for batch 78586 again.

29. That further analysis revealed results similar to those being obtained by the TGA, such that the uniformity of content requirement for hyoscine hydrobromide in Travacalm could not have been met.

30. During the course of their investigation the QA Manager approached a Senior Chemical Analyst at Pan and asked them to print out the HPLC tests results for batch 78586.

31. The printouts showed the true test results and revealed the test results printed out and included in the batch records had been manipulated so as to record falsely that the concentration of hyoscine hydrobromide contained in the samples tested fell within the testing range that was required for the finished product.

32. The QA Manager called the Chemical Analyst into their office and in the presence of others put it to the Chemical Analyst that the data had been deliberately manipulated.

33. The Chemical Analyst said they had “played with the integration a little bit”. The QA Manager showed the Chemical Analyst the documents that had been printed but there was no further response from the Chemical Analyst.

34. Prior to the commencement of the TGA audit on 30 January 2003, the QA Manager informed Pan Management testing that had been undertaken had revealed that it appeared the Chemical Analyst had altered computerised test results on the HPLC computer.

35. Procuring the destruction of evidence – the original test results.

36. In late January and prior to 30 January 2003, Pan Management informed the QA Manager that the TGA would not be able to find the information the QA Manager had found – being printouts of the HPLC computer genuine test results.

37. On 30 January 2003, officers from the TGA attended Pan’s premises without notice to conduct and audit. Two days earlier the Senior Chemical Analyst had asked the Information Technology Manager at Pan to try and fix a HPLC computer in Pan’s laboratory.

38. In order to fix the problem the Information Technology Manager reformatted the computer and re-installed the operating system and other software and in doing so wiped the hard drive.

39. During the course of the audit on 30 January 2003 the Chief GMP Auditor informed Pan Management they had been informed that the computer had been reformatted, that data had been lost and the TGA were very concerned about it.

40. It was clear the TGA wanted to see the data on the computer. At the time of this conversation, the TGA were not aware that data manipulation had taken place.

41. On the night of 30 January 2003 a GMP auditor with the TGA examined a copy of the Travacalm batch records. He discovered the manipulation of the HPLC test results by a careful reading and comparison of various documents.

42. Overlay of 4 Individual Tablet Assay Chromatograms hyoscine 700% label claim Nil detected

47. The TGA first became aware of the data manipulation well after Pan Management had been informed by the QA Manager and by a different means, being analysis of the batch records rather than by a comparison with the pre-manipulation data.

48. It was the pre-manipulation data that Pan Management had sought to be destroyed so that the manipulation could not be discovered in the way the QA Manager had been able to.

49. On 28 April 2003, four staff of the TGA attended Pan’s offices at Moorebank in Sydney and provided a copy of the final audit report to the board of directors.

50. The outcome of the meeting was that Pan was advised that its manufacturing licence would be suspended for six months. The suspension of Pan's licence effectively put it out of business.