Hundreds Lose Jobs as Troubled Pharma Company Abruptly Shutters All Sites

A bottle of pills is shown in this illustration. Shutterstock

Illinois-based Akorn Pharmaceuticals closed all its locations in the United States this week, abruptly laying off hundreds of employees, according to a letter sent to employees by the company’s president and CEO, Douglas Boothe

The employees will receive no severance pay or extended health insurance.

The letter was obtained by the Herald & Review newspaper in Decatur, Illinois, the site of one of Akorn’s manufacturing facilities.

Akorn, which makes generic drugs for humans and animals, is filing for Chapter 7 bankruptcy. The company attempted a sale but did not receive a bid that would cover its outstanding liabilities, the letter said.

“In light of the company running at a loss for some time, the company’s lenders will not provide the additional financing required to continue to run the business,” Boothe wrote. “Effective immediately, we are closing all U.S. sites and laying off all employees as of Thursday, Feb. 23, 2023. These layoffs will be permanent.”

The company has seven U.S. locations and one in Hettlingen, Switzerland.

Akorn’s corporate offices and distribution center are in Gurnee, Illinois. Research and development are in Vernon Hills, Illinois, and Cranbury, New Jersey. Manufacturing facilities are in Amityville, New York; Somerset, New Jersey; and Decatur, Illinois.

“I truly regret that these actions have become necessary. This is a shock,” Booth said. “It will take some time to absorb the news and what it means to you and your colleagues.”

The company has more than 2,000 employees but it is unclear how many are in Switzerland. Akorn did not respond to calls or emails requesting comment.

Troubled History

The German pharmaceutical company Fresenius agreed in 2017 to buy Akorn for $4.3 billion, but the deal fell through in 2018 after Fresenius said Akorn had not followed the U.S. Food and Drug Administration’s (FDA) data integrity requirements, the

In 2019 the FDA issued letters listing “significant violations” in its manufacturing process for contamination of drugs it produced. An eye solution had leaking bottles. Metal shavings were found on aseptic filling equipment during filling of lidocaine hydrochloride 2 percent jelly. And the company failed to follow appropriate written procedures that are designed to prevent microbiological contamination of drug products purporting to be sterile, the FDA said.

In 2020, Akorn filed for bankruptcy but emerged from it after it was sold to its lenders.

Akorn’s former majority shareholder John Kapoor is serving five years in federal prison for orchestrating a scheme to bribe practitioners to prescribe Subsys, a fentanyl-based pain medication, often when medically unnecessary, according to a 2020 statement from the Department of Justice. Kapoor was convicted of racketeering conspiracy.

In September, Akorn agreed to pay $7.9 million to resolve claims that it caused Medicare to be billed for over-the-counter drugs that were not eligible for coverage, Reuters reported.