Furloughs at Nephron followed FDA probe of pharmaceutical company’s practices
Nephron Pharmaceuticals has furloughed at least 70 employees as the company faces federal scrutiny over its drug manufacturing work in Lexington County, The State has learned.
The company, which received two government warning letters last fall over unsanitary conditions and production issues, said this week that it was furloughing some of its workers, but did not say how many.
In reporting on the temporary furloughs Thursday night, the company said “this does not mean that Nephron is terminating them.’’
So far, at least 70 employees have been furloughed, sources confirmed to The State. The furloughs are expected to last for three months and were necessitated by a “business need,’’ Nephron said. The company had no comment Friday, declining to say whether additional employees would be affected.
Nephron had not informed the state Department of Employment and Workforce of any planned layoffs, as would be required by law, agency spokesperson Jadai Bergolla said Friday.
Still, the furloughs brought a chill to Lexington County leaders worried about a company they say has been a good corporate citizen and partner since opening nearly 10 years ago in a huge new manufacturing plant on Cayce’s 12th Street Extension.
Nephron, which produces multiple pharmaceutical products, is a major employer, with just under 2,000 full-time and part-time workers, according to the company.
“They employ thousands of workers who eat at our restaurants, shop in our stores and get gas in Cayce,’’ Cayce City Councilman Hunter Sox said. “They donate to the Cayce Beautification Foundation and other great causes in the city. They’re an important partner. We want to see them succeed.’’
State Rep. Micah Caskey, R-Lexington, echoed those thoughts, saying he hopes the company works out economic challenges that spurred the furloughs. State Sen. Katrina Shealy, R-Lexington, said Nephron is a good company that had to work fast during the COVID 19 pandemic, as did other companies, and that may have created some problems.
“When they get a handle back on that, everything will be back to normal,’’ Shealy said. “It’s a big concern for everybody, but COVID played into a lot of things, with a lot of people’s operations and how they produce things.’’
Nephron’s operations came under scrutiny last year after inspections by the U.S. Food and Drug Administration.
The company, among other things, used an unapproved substance to make drug compounds as well as to produce or package drug compounds under unsanitary conditions, according to an Oct. 21, 2022, warning letter from the FDA.
Nephron’s failure to ensure sanitary conditions may have caused drug products to “become contaminated with filth or rendered injurious to health,’’ the warning letter said.
FDA officials also said the company didn’t adequately evaluate or correct problems. They noted as many as 1,600 cases of possible microbial contamination. The Oct. 21 letter said delivering contaminated drugs is illegal under federal law.
The company has said it had no indication products were contaminated or that they threatened patient safety.
After the FDA raised concerns early in 2022, Nephron voluntarily recalled a number of pharmaceutical products in May and June. But following the FDA’s October warning letters, the U.S. Department of Veterans Affairs told patients to stop using some of the drugs manufactured by Nephron.
In the Oct. 21 warning letter to Nephron, the FDA said, “Some of your corrective actions appear deficient.’’
Jeremy Kahn, a spokesman for the FDA, said he could not comment on where the agency’s inquiry into Nephron stands.
“We generally don’t talk and comment about ongoing compliance matters,’’ he said.
The FDA can send noncompliant companies to the U.S. Department of Justice for potential enforcement. In the Oct. 21 warning letter, the FDA said failure to comply “may result in action without further notice, including, without limitation, seizure and injunction.’’
While Nephron wasn’t saying much this week, the company has previously pledged to cooperate with federal agencies. It has also hired a chief quality officer.
“Nephron will work with the VA — in the same cooperative and collaborative manner it has worked with FDA this year — to resolve any outstanding matters or concerns the VA has,” Nephron said early this year in response to the VA’s action. “Our commitment to quality remains second to none because the lives of patients depend on the hard work of our team.”
One of the major issues Nephron has had to deal with is how it was compounding drugs, a process where drugs are blended and made into a product for specific medical uses, records show.
The process is not as tightly regulated by the FDA as other drug manufacturing. The agency said compounding drugs under unsanitary conditions can lead to “widespread patient harm,’’ particularly when the manufacturer engages in large-scale distribution, the agency says.
Nephron in 2020 was sued by a rival drug manufacturer — Nexus Pharmaceuticals — which claimed that the South Carolina company was making and selling unapproved new drugs under the guise of compounding. The resolution of the case was not known Friday.
Nephron has been a success story for Lexington County and for South Carolina.
Headed by University of South Carolina graduate Lou Kennedy, Nephron has expanded since it first opened in 2014 and added more jobs. The company’s growth and its role as a major employer has been particularly popular with politicians.
Then-education Secretary Betsy DeVos visited Nephron in 2019, and Kennedy was invited to the White House to meet with then-president Donald Trump later that year. Top company officials have also supported former S.C. Gov. Nikki Haley, now a Republican candidate for president.
“This great company continues to show that we have the talent and the ability to do anything we put our minds to, right here in South Carolina,’’ Gov. Henry McMaster said in a 2021 news release about company expansion plans.
McMaster’s office did not respond to requests for comments Thursday or Friday.
This story was originally published February 18, 2023 at 8:57 AM.
