The events surrounding McNeil Consumer Healthcare’s recall of contaminated Infant’s Tylenol in 2010 eventually led to a $25 million fine being levied agaist the company by the FDA this year. McNeil’s contamination isn’t an isolated incident, but rather symbolic of a trend in increased supply chain scrutiny drug makers are seeing from the FDA, causing the number of drug recalls every year to skyrocket.
Contaminated Tylenol, A Compromised Supply Chain
In May of 2009, the FDA began investigating consumer complaints about suspicious-looking black specks found a bottles of Infants’ Tylenol. The investigation discovered that the specks were dangerous metal particles, including nickel, iron and chromium, introduced during the manufacturing process at Johnson and Johnson subsidiary, McNeil Consumer Healthcare’s plant in Fort Washington, Pennsylvania. The plant continued to manufacture the liquid Tylenol for several more months after discovering the contamination. While McNeil eventually issued a voluntary recall of Infants’ Tylenol and Children’s Motrin, a follow up FDA investigation revealed that the company had failed to institute a corrective action plan in response to the contamination. After five years of additional investigation, discovery, and litigation, the FDA has levied a $25 million criminal fine against McNeil Healthcare.
The McNeil’s Pennsylvania plant was shut down in April 2010 and rebuilt from the ground up after the contamination was found. For now the factory will remain closed; McNeil will need to implement additional remedial measures before the factory can be reopened as a result of the ruling.
Upsurge of Medical Recalls
McNeil Healthcare’s half decade recall saga may be over, but for the rest of the pharmaceutical industry, recall headaches may just be getting started. Over the past seven years FDA drug recalls have increased dramatically, from 164 in 2009 to a record 1,225 in 2013. 836 recalls were issued In the first eight months of 2014 alone.
A three-tiered system is used to classify FDA recalls. A product falls under a Class I recall if it will likely cause serious health damage or death. A Class II recall is issued when a drug may cause temporary or medically reversible health consequences, while Class III recalls are for defective products that most likely won’t have adverse effects.
In the first quarter of 2015, leading injectable manufacturer Hospira announced two nationwide recalls of sodium chloride injections after human hair was found in one vial for each lot. Sun Pharma has also issued two Class II recalls within the same period; one for antiepileptic drug Levetiracetam for failing dissolution specifications, and another for Ketorolac eye drops due to presence of unspecified particulate matter. Meanwhile, compromised sterility at their respective manufacturing plants has led Heritage Pharmaceuticals and Sagent Pharmaceuticals to initiate nationwide recalls of their own injectable products.
Drug makers aren’t the only medical companies getting increased attention from the FDA; the number FDA Form 483 Warning Letters issued to medical device manufacturers tripled between 2008 and 2011. Recalls of medical devices per year also doubled between 2003 and 2012. Device manufacturers are currently waiting to assess the full extent of fallout from a recent ‘superbug’ outbreak (link) at several U.S. hospitals linked to contaminated duodenoscopes. So far the FDA’s response has been tempered, but device manufacturers are gearing up for more severe reactions in the future.
The majority of pharmaceutical recalls are ultimately traced back to errors in the manufacturing process. Now these errors are being exacerbated by the increasing complexity of the pharmaceutical supply chain, making discovery of the source of contaminations and prevention more difficult.
Tighter Regulations, Open Information
As the sourcing of chemicals for many drugs in the United States begins to reach overseas, serious issues with chemical quality and the prevalence of counterfeit ingredients have arisen. The EU’s chief drug regulator recently recommended placing an unprecedented moratorium on prescribing over 700 generic drugs manufactured in India. The recommendation comes after Indian research firm GVK Bio found those mand Indian drug approvals were based on flawed or forged clinical study results. Though foreign manufacturing firms have the technical capacity to manufacture and supply active pharmaceutical ingredients for American and European drug makers, the Indian regulatory structure can be too easily compromised for western drug regulators to trust.
In an effort to maintain product quality in the midst of supply chain globalization, earlier this year the FDA began enforcing compliance with the Drug Supply Chain Security Act. While the law only applies to certain prescription drugs, it is expected to improve the quality and traceability of products, and enhance the efficiency of drug recalls. In an effort to be more transparent in the reporting of drug recalls, the FDA has also launched openFDA, an online resource for easier access to public data including product recalls.
As pharmaceutical supply chains become more complex, regulatory agency responses will begin to err towards more scrutiny and detailed monitoring at all levels of production. As a result, the number of drug recalls is likely to continue to rise. To be prepared, manufacturers would do well to abide as closely as possible to the FDA’s non-binding guidelines for drug and device manufacturing to help prevent against avoidable contaminations.
It’s good to see supply chain management getting more attention in higher education. Supply chains are both more complex and more important than ever before. We will see a major shift towards supply chain management as a core competency for senior executives at Fortune 1000 companies. Here are recommendations for students and new grads looking to get their careers off to the right start. In Part 2, I’ll be sharing recommendations for employers.
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