On Friday, McNeil Consumer Healthcare division of Johnson and Johnson announced the voluntary recallof the entire U.S. supply of infants grape-flavored Tylenol which amounted to over 570,000 bottles. The product had just returned to retail outlets in November. This latest recall comes after a long series of past recalls involving Tylenol and other J&J branded medicines including Benadryl, Motrin and Zyrtec that date back to 2009 and have been attributed to previous cutbacks.  The reason for the latest voluntary recall was described as a design flaw involving the bottle cap and dose dispensing syringe.  The new cap was introduced last year in an effort to re-capture lost sales. J&J took the action after receiving a “small number of complaints” from consumers but stresses that to the company’s knowledge, no infants have been harmed, and that “the risk for a serious adverse medical event is remote”.

This recall could not have come at a worst time as J&J was struggling to rebuild consumer credibility in its OTC medicine brands, and must now face yet another challenge to rebuild consumer confidence.  Even though the recall involved a specific product area (one ounce oral suspension infant Tylenol) we speculate that the decision to take this action was not taken lightly and had to involve discussions at the senior most levels of the company.

According to a report published in the Wall Street Journal, total revenues for the McNeill division are down 55 percent from a peak year in 2008. The Tylenol brand itself has slipped from second in sales of over the counter pain medicines in 2009, to now rank eight.  In a released statement on Friday, J&J CEO William Weldon stated that this latest recall was “clearly disappointing after all the progress that McNeil has been making to ensure its products meet the highest level of quality and consumer satisfaction”. Readers may recall that it was only a couple weeks ago that J&J announced a re-shuffle of senior management concerning the McNeil unit which perhaps adds even more perspective to this latest development.

When an organization discovers significant systemic breakdowns in quality and accountability there is always a tendency for existing players to exhibit a rather cautious mentality, or perhaps a “bunker” mentality.  This often times requires senior management to set very clear direction, motivation and an emphasis for what needs to change vs. what tenets need to remain.  There is often a need for articulating an overall integrative framework of required transformation including what areas of operating practices, business metrics and people-related training skills must be changed.  Management must lead by example and be visibly active and participative in key transformation decision-making.

Sometimes however, change is only defined in a singular context, for instance a need to revamp a single production facility or change a few specific processes, without context and alignment to an overall end-state framework.  Sometimes, a particular function such as sales and marketing can still have a final say. In the case of McNeil and J&J only they and their management teams can readily conclude whether this has occurred.

Setting integrative goals is so very important.  In this latest situation involving infant Tylenol, we have to speculate why was a new packaging design introduced on an infant product area without extensive consumer involvement and testing, especially in light of the need for restoring consumer confidence? What about adequately addressing and testing the quality control measures of the packaging process?

Fundamental questions but yet, another challenge for J&J and its McNeil unit to once again overcome.

Bob Ferrari

One of the very first supply chain risk and disruption incidents that the Supply Chain Matters blog noted during its inception a little over two years ago was the incident involving contaminated heparin that occured within China.  We were literally taken aback that product contamination incidents would be occurring in the most regulated and safety sensitive of supply chains.  If these quality breakdown incidents were occurring in this segment, what about other less regulated supply chains?  It did not take long to gather other evidence after the incidents of quality breakdowns in drug-related supply chain continues.

In one of our summary commentaries in March of 2008, Drug Imports from China- Controls are Mandatory, we noted that government inspections cannot be relied upon to be the sole quality control point for drugs, medicines and medical materials being imported from China. At that time, there were over 700 Chinese drug makers registered with the U.S. Food and Drug Administration (FDA), with just 14 inspections completed.

Two years since, a recent Wall Street Journal article, FDA Faulted in Heparin Case (paid subscription may be required) indicates that U.S. congressional investigators have observed that the “FDA failed to pursue several “specific and credible leads” that might have identified culprits in China” during the 2008 heparin contamination incident.  The overall incident was ultimately linked to 80 deaths impacting the most medically critical area of drug delivery.  This article further notes that “one red flag that the FDA allegedly ignored was that a foreign “respectable regulatory government agency had shared “a significant finding” that a Chinese company was making counterfeit crude heparin to be shipped to the U.S. under another firm’s label.” The FDA never issued a definitive finding as to who or what was responsible for the heparin contamination incident, that in essence there were too many sources of potential contamination. Even more problematic is that the Congressional letter further observes “that the FDA faces legal and linguistic hurdles in conducting probes overseas.”

The obvious question therefore remains, has the pharmaceutical industry learned anything from previous deadly and shocking incidents of contamination?  Have new, more adequate controls been put into effect to both control or detect the presence of contamination from either foreign or domestic production sources before reaching patients? I believe that the answer is sketchy at best.

The newest conflicting evidence involves the incident of McNeil Consumer Healthcare, a division of Johnson and Johnson Inc., that is working in consultation with the FDA in implementing a voluntary recall of infant and children’s liquid products due to manufacturing deficiencies which may affect quality, purity or potency. The products include certain liquid infant’s and children’s Tylenol®, Motrin®, Zyrtec®, and Benadryl® products which were produced in U.S. facilities. According to an ABC News Report (video) an FDA inspection found a wide range of problems at McNeill’s Pennsylvania production facilities triggering a number of  “red flags”.  In this incident, the FDA actually did its job and called for action by the manufacturer.

As we noted previously, quality and safety will have to come from highly controlled and monitored processes, managed by the brand owners themselves.  Two years after the heparin contamination incident, the U.S. government is still engaged in a finger-pointing exercise and pharmaceutical companies have breakdowns in quality control and monitoring processes. Patients and consumers have to figure out for themselves what drugs are safe, and a highly regulated supply chain shows signs of breakdowns among its various players.  The industry has to solve its problem of quality controls both from domestic and international production sources, and it cannot just punt to the FDA to be the continual watchdog. The FDA has a finite number of resources and cannot be expected to cover all international sources of production.  As noted, the FDA is busy enough just trying to monitor and control domestic incidents.

Sick and dependent patients, children, and all of us, deserve better. The Pharmaceutical industry needs to step-up in efforts in quality monitoring and control, as well as risk detection.

Bob Ferrari