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The New Economy

With Tylenol recall 2010, a corporate icon stumbles

Johnson & Johnson burnished its image with a gutsy Tylenol recall in 1982. But its 2010 recall was long overdue, an FDA report charges.

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Other waves of complaints cropped up the following April, June, and August, according to the report, but the company didn't issue an alert until September, didn't investigate other batches of Tylenol, and didn't initiate a recall until November.

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Probable cause: wooden pallets

By mid-December, two company investigations had concluded that the most probable cause of the problem was chemically treated wood from pallets and empty bottles coming from the bottle manufacturer, the FDA report said. McNeil expanded its recall on Dec. 18 to include all lots of a Tylenol arthritis product with a red easy-open cap.

But again, the company failed to assess other medicines using packaging material from the same supplier, according to the FDA report, despite more than 10 complaints of mustiness for its Rolaids product and more than 39 similar complaints for another Tylenol product.

Separately, the company investigated a 2008 electrical failure during the manufacture of its Motrin product, concluding that the extended downtime did not have an effect, according to the FDA report. But the federal investigator noted that the company's study did not consider the actual conditions, including "electrical failures, temperature and sensor problems, computer and instrument problems that may affect the process critical parameters."

That highly critical report was filed Jan. 8. On Jan. 15, McNeil expanded the recall to include those products. "A small number of the product lots being recalled were associated with the complaints of an unusual moldy, musty, or mildew-like odor," the company said in a statement released Friday. "McNeil Consumer Healthcare has now applied broader criteria to identify and remove all product lots that it believes may have the potential to be affected, even if they have not been the subject of consumer complaints."

McNeil says its investigation is continuing and it is taking additional steps to combat the problem, including ceasing the shipment of all its products that used materials shipped on the suspect pallets, says Marc Boston, a spokesman for McNeil. The company is also requiring all its suppliers to stop using pallets treated with the particular chemical. He declined to comment on whether McNeil was still using the original supplier or had shut down the problem plant.

"We will be working with the FDA to respond to the letter and the correspondence," he adds.

Recession pressures?

Who knows what pressures the company was under? Drug companies, like most of the rest of corporate America, have been under intense pressure during the "great recession." They've had to trim costs. Puerto Rican drug facilities have been hit hard with layoffs.

Still, no matter what the economic environment, the best time to face up to your problems is immediately. It's a lesson that Johnson & Johnson taught corporate America nearly 30 years ago. Maybe it has to relearn it again.

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