J&J, Stung By Consumer Product Recalls, Creates Quality-Control Position
From Canadian Press DataFile (August 18, 2010)
Johnson & Johnson is creating a new position to oversee company-wide quality, manufacturing and compliance issues and appointing chief quality officers for each of its three major business units.
The moves come as the health care giant's once-stellar reputation for quality is being tarnished by repeated recalls of non-prescription medicines.
J&J on Wednesday named corporate Vice-President Ajit Shetty to oversee the push for quality improvements in its pharmaceutical, consumer products and medical device and diagnostics groups.
Since September, the New Brunswick, N.J., maker of Band-Aids and Tylenol has announced eight different recalls. They cover tens of millions of bottles of pain relievers Tylenol, Motrin and St. Joseph aspirin, allergy drug Benadryl, heartburn tablets Rolaids and Simply Sleep pills.
The recalls, which included liquid Tylenol for children and infants, involved products made at both a Fort Washington, Pa., factory shut down in April -- and expected to remain closed for another year while it is upgraded -- plus another factory in Las Piedras, Puerto Rico.
Food and Drug Administration inspections have uncovered problems at both those factories and a third one, in Lancaster, Pa., that's run by McNeil's joint venture with Merck & Co. That business makes former prescription drugs now sold in lower-dose non-prescription versions, including heartburn medicines Pepcid and Mylanta.
The recalls involve problems from contamination with bacteria and a nauseating smell on containers to liquid medicines that may contain tiny metal shavings and products that may have the wrong amount of active ingredient.
They hurt the reputation of a company once cited as a textbook example for how businesses should handle such problems. In 1982, J&J promptly removed Tylenol bottles from store shelves across the country after some were poisoned by a person who was never caught.
The company then kept the public well informed about the investigation and redesigned packaging to make it tamperproof.
J&J's appointment of one person to oversee quality issues companywide is a logical step in dealing with the recent recall problems, according to Larry L. Smith, president of the Institute for Crisis Management.
``If they've created a position that's going to have some clout, power and authority and they've picked the right person ... then they could very well be moving in the right direction," he said.
But J&J still has more work to do.
Once companies fix a problem and create consistent quality control, then they have to talk about it, Smith said. That means talking to investors, consumers and employees, to convince them the company is heading in the right direction.
J&J spokesman Bill Price said the chief quality officers and the creation of a new position are part of a "more comprehensive remediation plan" for the company.
The company's shares climbed 13 cents to US$59.35 in Wednesday trading.
AP Business Writer Linda A. Johnson contributed to this story from Trenton, N.J.
Posted: August 2010