Given the heightened awareness of patient safety that FDA and industry managers have exerted in recent years, product recalls are a growing factor in operational performance. Yet, many industry leaders I speak to have adopted a “that would never happen to me” mentality about recalls, despite evidence that recalls are on the rise. With this in mind, how prepared is your company for a recall?
According to a quarterly index of recall activity maintained by my company,* pharmaceutical and medical device recalls continue to steadily increase. In fact, the number of pharmaceutical events jumped 140% in the third quarter of 2012 alone. In the fourth quarter, 42 pharmaceutical companies faced recalls and more alarming, nearly half (19) of these companies faced more than one recall.
The message is clear – it’s not whether your company will face a recall, it’s when. Importantly, in many cases the first recall is not the last recall for a company. Complacency is the enemy of recall readiness. This is especially true in the pharmaceutical industry, where the ever-changing regulatory landscape and threat of litigation are making recalls more complex and, if mismanaged, more costly every day.
A lack of preparedness only slows recovery and further diminishes a brand. It compounds across multiple recalls leaving companies—and the industry—crippled by a muddied reputation, distracted employees, and mounting legal risks.
Pharmaceutical manufacturers need to start preparing today. The financial impact of any recall, from notification to destruction or disposal, can be devastating. Not only due to revenue lost from unsaleable products, but also from the potential financial impact of litigation and fines. Making things worse, a mismanaged recall can decrease customer confidence in a brand and have a heavy impact on revenues for years to come—adding significantly to the true cost of a recall in the long-term. Turning to best practices and leveraging available resources can help ensure a recall is managed efficiently and effectively—thereby reducing the cost of an event and resolving incidents quickly.
Develop a recall plan and test it regularly. A recall plan should provide the critical information needed to manage a recall from corporate organizational structure to instructions for regulatory agency notification to communication guidelines. Test this plan regularly through a mock recall simulation which tests every step in your recall plan to ensure your team is ready to respond quickly when an actual event occurs. Constantly evaluate and update the plan and simulation to address changes in regulations, technology, and products.
The basic elements of a recall plan are:
- Your corporate organizational structure, which maps out all supply chain operations, distribution centers, wholesalers, retailers, users and consumer consignees
- A designated recall coordinator and outlined responsibilities of the recall management team
- Details about recall fact-gathering to define the parameters of the recall including root cause, inventory and health significance
- Responsibilities, timing and processes for regulatory agency notification
- Recall communication guidelines for when and how to inform affected parties and answer questions
- Clearly defined policy and procedures for recall closing out.
Companies should also look at their current processes for ways to reduce recall risk. A large component of effective recall management revolves around a company’s ability to accurately identify, locate and withdraw all affected products. The ability to pinpoint affected units down to a batch or item level using track-and-trace technology can save a great deal of time, limit the scope of a recall, and reduce liability. For instance, by only recalling specific quantities affected by the recall, a pharmaceutical manufacturer can limit exposure and prevent lawsuits being filed by consumers who never purchased the recalled product.
Key to future success is learning from each event. Conduct an assessment of previous recall actions so you are better prepared for the next one. Examine your current recall capacity and determine where improvements are needed and make changes to better implement effective recall events.
It is sometimes difficult to imagine how your company would be impacted by a recall. If you haven’t done so already, you should move recall preparation to the top of your agenda.
ABOUT THE AUTHOR
Mike Rozembajgier is vice president of recalls for Stericycle ExpertRECALL™. Rozembajgier is responsible for all aspects of recall service offerings, including development of strategic recall business initiatives and product enhancements. He has more than 10 years of experience in the healthcare industry. Prior to joining ExpertRECALL, Rozembajgier held various management positions at Guidant Corp. (now Boston Scientific) and at Deloitte in the Strategic Consulting practice.