In 1982, Johnson & Johnson garnered an enduring amount of goodwill when, seemingly without any thought of lost profit, it immediately yanked Tylenol from the shelves nationwide after learning someone was slipping cyanide into bottles in Chicago. The company’s sure and swift PR response became the model for crisis management for the corporate world.
But in what is shaping up as a dramatically different sequel, a House Oversight Committee hearing revealed last week that J&J’s Tylenol-making subsidiary, McNeil, waited an entire year before notifying FDA that it had received reports of a “musty” smell in some of their children’s products. It came to light as well that the company had initiated a “phantom” recall for Motrin IB packets suffering from a dissolution problem—there was the possibility of reduced potency. McNeil contracted a third party to buy up the product; these buyers were encouraged to act like regular customers. FDA told them to start a real recall in July 2009.
This after more than a year of FDA identifying numerous quality-control issues with manufacturing practices at McNeil facilities. In general, FDA said, the company fixed these problems, but new ones kept cropping up—including gram-negative bacteria in unused ingredient lots and metal particulates in some liquid products. And so months of continued manufacturing violations and smaller recalls culminated the big one: an April 30, 2010 voluntary recall of 136 million bottles of liquid kids’ medicine.
Once thedr official recalls were issued, the company implemented its admirably efficient recall process, and FDA stressed in the hearing that it didn’t see a significant health risk to consumers in any of the products recalled.
The manufacturing problems, FDA said in the hearing, stemmed largely from McNeil’s corporate structure, and added that the company appears to be trying to right its listing manufacturing ship with management consultants, improved reporting structure, and other steps. Marcel Wijma, CEO of Van Leeuwenhoek Research, agrees with FDA: “The fact that this was not a one-time event says something about the managerial controls.” He said the first thing the company should do is consider swapping out its manufacturing heads. “Then they need to put their procedures up for discussion.” J&J worldwide consumer group chairman Colleen Goggins, who testified at the hearing, said several executives had indeed gotten the axe, but couldn’t give the Committee any names.
The issue of the phantom recall (and “delay in reporting material information”) “has been referred to the FDA’s criminal investigation unit,” according to FDA’s CDER compliance office director, Deborah Autor; but what, exactly, that means for the company and its executives was not revealed at the hearing.
Watch video of the entire hearing here.