Another J&J Recall Disaster

Another J&J Recall Disaster

March 26th, 2013 // 3:18 pm @

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And yet another product recall from Johnson & Johnson. The latest involves 1.9 million OneTouch Verio line of blood glucose meters, which were malfunctioning at extremely high blood glucose levels. Three different models either failed to display the proper warning and turned off or displayed incorrect readings. This can be a problem, of course, because someone who fails to act on a high reading can become seriously ill or worse.

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In fact, this is what happened in Europe, where the J&J LifeScan unit received one report of a “serious adverse event” attributed to its Verio Pro meter. However, a spokesman acknowledged to Bloomberg News the serious reaction was, in fact, a patient death. The healthcare giant says it “has not determined whether the OneTouch® Verio®Pro Meter was a causal factor.” We asked J&J why the adverse event was not described as a death and will update you accordingly.

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“The likelihood of experiencing an extremely high blood glucose level of 1024 mg/dL or higher is remote; however, when such a blood glucose level occurs, it is a serious health risk requiring immediate medical attention. Because these products do not provide an appropriate warning at glucose levels of 1024 mg/dL or higher, diagnosis and treatment of extreme hyperglycemia may be delayed or incorrect treatment may be given resulting in potentially serious health risk or fatality,” the LifeScan statement reads (look here).

As we have reported numerous times, the recall is only the latest in a long series of product recalls, which have included such venerable over-the-counter staples as Tylenol, Motrin, Rolaids, Sudafed and Benadryl; K-Y Jelly; Acuvue contact lenses; syringes, hip replacement devices and the Topamax epilepsy drug. J&J has since sold the Rolaids brand to Sanofi as part of portfolio pruning.

The OTC product recalls reflected serious manufacturing issues. A congressional investigation revealed J&J (JNJ) surreptitiously conducted recalled some products after discovering problems at its plants and hired outside contracts to work as ‘mystery shoppers’ to remove items from stores. A key plant is now being retooled and operating under a consent decree (see this). Meanwhile, 300 jobs were cut and hundreds of millions of dollars in sales were lost.

The J&J Ethicon unit last year halted marketing of four vaginal mesh implants that have been the subject of lawsuits filed by approximately 1,000 women who claim the products have caused serious internal injuries. The healthcare giant also had difficulty stocking Tampons and the Nizoral anti-fungal shampoo, the only over-the-counter shampoo that is a salve for dandruff and psoriasis.

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The cumulative effect of these various recalls, which have effected all three strategic pillars – drugs, devices and consumer healthcare products – have made it harder for J&J to restore confidence among some parents, physicians and retailers.

Of course, with a company so large and diverse as J&J, product recalls are going to occur, but the scale and regularity of the assorted problems continues to suggest that the management team will struggle to ensure that the decades-old corporate reputation for quality and reliability can be preserved.

Investors, however, have downplayed the problems and decided any institutional issues are being addressed. Over the past year, J&J stock has climbed 30 percent, and this return does not include dividends.

H/T: Pharmalot

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