Friday, March 11, 2011

J & J and Triad Recall Costs

Johnson and Johnson and Triad Group are paying a big price for their mistakes.

On the one hand, the U.S. Food and Drug Administration has prohibited J & J from reopening its Fort Washington, PA plant until it meets FDA quality standards. The plant is one of three tied to repeated recalls of defective or contaminated medications, including Children’s Tylenol and Benadryl and Motrin.

Triad, on the other hand, announced it was discontinuing use of a production line at its Hartland, WI plant that was the production site for millions of packages of contaminated alcohol wipes and lubricating jelly.

J & J says it will continue to make the same products at plants in Las Piedras, Puerto Rico and Lancaster, PA. Triad announced it will continue to make wipes and lubricating gel under private labels and store brands.

Eric Haertle, Triad’s COO, and one of three siblings that own the private company, said the massive recall and mounting number of lawsuits against the company have led to “difficult times” for the family owned business, but he insisted they would be “cleared of all charges.”

The odds are against you, if you need a shot or an IV in your doctor’s office or a hospital or emergency clinic. In spite of a nationwide recall, it’s hard to imagine that all of the millions of wipes packages and lubricating jelly have been removed from supply cabinets. And health experts say they are even more concerned about the potential millions of homes that have packages of contaminated alcohol wipes in medicine cabinets with store brand names on them.

J & J has had 20 recalls since September 2009 including children’s medicine, contact lenses and hip replacement hardware.

So what does this mean to you and crisis planning, prevention and crisis management?

Both companies are taking major hits to their bottom lines. In its most recent reporting quarter, J & J recorded a 12-percent drop in profit, and sales of the company’s over-the-counter medicines were down more than 19-percent for 2010.

And, Triad is facing a growing number of multi-million dollar lawsuits, plus they are no longer manufacturing and selling wipes and gel to doctors and hospitals.

Remember, we always say, two-thirds of all business crises are preventable. Both companies could have prevented the crises they are facing.

YOU CAN AVOID MOST CRISES, TOO. All you have to do is the right thing, for the right reason, every day. Cutting corners and ignoring the “little things” will almost always end up biting you where you sit.

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