12WWW.CEN-ONLINE.ORG JUNE 7, 2010

NEWS OF THE WEEK

M ITSUBISHI CHEMICAL AND Asahi Kasei, two highly diversified Japanese chemical produc-ers, have agreed to merge and downsize their

ethylene facilities at the aging Mizushima petrochemi-cal complex in southern Japan. Their move comes amid a loom-ing glut of basic petrochemical products worldwide as large new facilities come onstream in the Middle East and China.

For the past 45 years, Mitsubi-shi Chemical and Asahi Kasei have operated separate ethylene crackers at Mizushima, each with an annual production capacity of 500,000 metric tons. After undertaking a feasibility study over the past year, the two have agreed that one of the two crack-ers will be closed in the next few

years—they haven’t decided which one—thereby re-moving about 7% of Japan’s ethylene capacity.

Industry watchers aren’t surprised. “We estimate that there is 8 million to 11 million metric tons of eth-ylene capacity coming onstream in the Middle East and China this year,” says Samuel Liew, an Asia-region olefins and elastomers analyst at the consulting firm Chemical Market Associates. “Japan exports 30–40% of its petrochemical output, and it enjoys no cost ad-vantage within the Chinese market.” China is the main importer of petrochemicals in Asia.

In recent years, Mitsubishi Chemical has initiated a series of strategic moves to reinvent itself. It has be-come a conglomerate, Mitsubishi Chemical Holdings, in which the chemical business is a core member along-side Mitsubishi Tanabe Pharma, Mitsubishi Plastics, and the group’s latest acquisition, Mitsubishi Rayon. The pharmaceutical business generated most of the conglomerate’s profits in the latest fiscal year.

Liew sees more rationalization moves ahead in the global petrochemical industry. In the Japanese sector, he points out, some companies have opened lower cost facilities in the Middle East, which may allow them to close plants at home. He also expects petrochemical players in North America and Europe to close their older and higher cost plants in the face of the onslaught of new, efficient capacity from the Middle East. “All the ethylene crackers coming on-line in the Middle East and China have a capacity of at least 800,000 metric tons,” he notes. —JEAN-FRANÇOIS TREMBLAY

GENERIC DRUG manufacturers are not shielded from lawsuits over the safety of their products despite FDA approval, a federal judge has ruled.

On May 26, U.S. District Judge Berle M. Schiller re-fused to dismiss litigation brought by consumers who claim that Impax Laboratories and codefendant Teva Pharmaceuticals USA knew that their generic versions of Wellbutrin release the antidepressant’s active ingredient faster than the branded version sold by GlaxoSmithKline.

The suit alleges that the generics companies failed to warn patients and doctors about the different release rates. The consumers complained that because of the more rapid release, the generic drug, bupropion hydro-chloride, was less effective in treating depression and more dangerous than the original drug.

Lawyers for Teva and Impax argued that the suit should be dismissed because FDA had determined that

their generic versions are bioequivalent to the original Wellbutrin and are equally safe and effective.

But in a 29-page decision, Schiller asserted that a generic drug manufacturer is not absolved of liability because FDA has approved its generic product. Federal law, he wrote, “allows generic drug makers to expedi-tiously get their products to market—it does not allow generic drug makers to wash their hands of any respon-sibility for monitoring the safety and efficacy of their drugs once sold.”

Schiller cited the U.S. Supreme Court’s March 2009 ruling in Wyeth v. Levine, in which the justices held that FDA approval of a medication does not shield the brand-name manufacturer from liability under state law (C&EN, March 9, 2009, page 8). The ruling is one of the first applications of this high court decision.

Schiller concluded that generic drug manufacturers also have a duty to issue warnings about any new haz-ards that come to light after approval. “ Levine teaches that the ultimate responsibility rests with the drug maker, not FDA, to either adequately inform the public or remove the drug from the market,” he wrote.

The case will now go forward in the U.S. District Court for the Eastern District of Pennsylvania in Phila-delphia. Impax says it stands by its drug as a safe and ef-fective product and “will continue to vigorously defend our position” in the litigation. —GLENN HESS

Makers of all drugs, generic or branded, have ultimate responsibility for product safety, a federal judge has ruled.

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The Mizushima complex in southern Japan.

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DOWNSIZING ETHYLENE

PETROCHEMICALS: Two Japanese firms prepare for onslaught of

Middle Eastern capacity

FDA APPROVAL IS NOT A SHIELD

LIABILITY: Like brand-name companies, generic drug firms can be sued for not warning about risks