A Food and Drug Administration investigation at Leiner Health Product's plant in Fort Mill, S.C., found that the drugmaker's manufacturing practices were not up to snuff. That prompted Leiner to suspend production and issue a recall of its over-the-counter allergy and pain-relief drugs, which accounted for 30% of the company's annual sales.
Six months later, the Department of Justice launched a separate investigation at the same production facility. That drove Leiner's top customers, including major drugstore chains and wholesale giants, to take their business to competitors, the company said.
The severe sales drop forced Leiner to downsize its workforce by 40% and consolidate its manufacturing facilities. One year after the recall, Leiner filed for bankruptcy protection to restructure debt of nearly $436 million. Just a few months later, vitamin and supplement manufacturer NBTY Inc. bought Leiner for $371 million.
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