AmerisourceBergen will be shuttering its Cleveland PharMEDium plant, laying off 140 workers, but the Pennsylvania-based company received $1,150,000 from several Mississippi Development Authority programs to move a distribution center to Olive Branch, where the $48 million facility employs 129 workers.
The DeSoto facility received $600,000 from the Development Infrastructure Program, which builds and repairs publicly-owned infrastructure, such as roads, for new and expanding businesses. If AmerisourceBergen were to miss its job creation goals, the company would have to repay the grant.
Under the DIP program, companies aren’t required to make an investment commitment.
AmerisourceBergen received $500,000 in grants from the Mississippi ACE Fund, which like the DIP program, can be clawed back if the company doesn’t meet job creation goals. The MDA calls this fund a “deal-closing fund” and this money can be used to relocate equipment, provide employee training or building improvements.
AmerisourceBergen also received $50,000 for training under the Workforce Training Fund in 2017.
AmerisourceBergen is also participating in the Advantage Jobs Incentive Program that provides a rebate of 90 percent of Mississippi payroll taxes withheld to qualified employers for 10 years.
The Cleveland plant was part of a 2015 acquisition by AmerisourceBergen of Illinois-based PharMEDium for $2.575 billion. The transition hasn’t been the smoothest for the parent company.
The company said in a first quarter filing with the U.S. Securities and Exchange Commission that it likely won’t restart production this year at its Memphis PharMEDium facility where it laid off 225 workers in January.
Both the Memphis and Cleveland plants are compounding facilities that mix drugs in syringes and intravenous bags for sale to hospitals, which see cost savings from not having to do them in-house.
PharMEDium also has facilities in Dayton, New Jersey and Sugar Land, Texas.
Production at Memphis was suspended by AmerisourceBergen in December 2017 after an inspection by the U.S. Food and Drug Administration found issues with sterility with syringes made at the facility. The company said in its SEC filings it is enacting corrective measures to fix the problem.
The company issued a voluntary recall in December 2017 on some of its products because of a lack of assurance in their sterility.
The company received a grand jury subpoena from the U.S. Attorney’s Office for the Western District of Tennessee in November 2017 for documents about lab testing of a certain type of syringe made at the facility.