NEW YORK (CNNMoney.com) -- A scathing report released Tuesday by the Food and Drug Administration slammed conditions at the factory that produced the children's Tylenol, Motrin, Benadryl and other over-the-counter drugs that were recalled over the weekend.
The 17-page FDA inspection report conducted in late April detailed quality and security lapses at the Fort Washington, PA-based facility, which is owned by Johnson & Johnson's (JNJ, Fortune 500) McNeil PPC drug manufacturing division. The agency said it is considering a wide range of actions including possible criminal penalties.
Johnson & Johnson said it has temporarily suspended production at the plant. It is the company's only plant that manufactures all of its liquid pediatric drugs.
"We have no higher concern than providing parents with the highest quality products for their children," the company said in a statement Tuesday. "The quality issues that the FDA has observed, many of which we had recently identified in our own quality reviews and communicated to the FDA, are unacceptable to us."
While the FDA said parents should immediately discontinue use of any of the recalled products, the agency maintained that the potential for adverse medical effect from the recalled drugs is still "remote."
In a press call Tuesday, FDA Commissioner Margaret Hamburg said parents should immediately use generic versions of the recalled drugs.
Deborah Autor, FDA's director with the Office of Compliance, said the agency met with Johnson & Johnson's senior management in February.
"We expressed serious concerns about McNeil's manufacturing operations," she said. Although the FDA was scheduled to do a routine inspection of the plant, she said the February meeting "drove us to inspect the plant more quickly."
Autor also admonished McNeil for its latest recall, its fourth in the past seven months.
"This is yet another example of when a company has to take full accountability for the quality of its drugs [with] severe consequences for not doing so," she said.
The FDA will now conduct a more detailed analysis of its findings before determining what the consequences could be for McNeil. She said the FDA's actions could range from a warning letter to criminal penalties.
In its report, the FDA said McNeil did not initiate "corrective and prevention action" after it had received 46 consumer complaints from June 2009 to April 2010 regarding foreign materials and black or dark specks in its drugs.
The agency cited the facility for not following quality controls and for not maintaining adequate lab facilities for the testing and approval of components and drug products.
Autor said the agency's findings showed that McNeil bought contaminated raw material from its vendors, which tested positive for a type of bacteria that the the FDA has not yet identified.
However, the agency said McNeil's testing showed that the contamination did not reach its finished products, it is conducting its own probe.
The FDA found there were no written procedures to ensure "the identity, strength, quality, and purity" that the drugs produced there were said to possess.
Further, the agency said the plant's employees "[were] not given training in current good manufacturing practices and written procedures required by current good manufacturing practice regulations."
McNeil recalled some 50 children's versions of the non-prescription drugs on Saturday for quality concerns, including "tiny particles" in some of the products that the company said may be solidified product ingredients or manufacturing residue such as tiny metal parts.
Kyle Bass is the founder and chief investment officer of Hayman Capital Management. More
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