US pharma product recalls jumped at the end of 2016

There are two types of reverse logistics relevant to the pharma industry: product returns—usually a business decision based on overstock at pharmacies and the like; and recalls—usually performed with the recommendation if not requirement of FDA for faulty products. For the latter, Stericycle, a leading reverse-logistics provider for the industry, tracks both the number and volume of recall activity nationally, and reports that the last quarter of 2016 saw an uptick of 28% from the previous quarter and the highest since Q3 2014, and that the volume of units recalled also jumped, by 192%, to 25.1 million units, the highest since Q2 2015. Recall counts, especially of the unit volumes involved, are relatively volatile, but the Stericycle data show that recall activity was relatively quiet for the second half of 2015 and first half of 2016. The Q1 2017 data, when available, will show whether an upward trend is beginning.

Other data collected by Stericycle: the main causes of the recalls were failed specifications, sterility issues and mislabeling, which accounted for nearly two-thirds of the causes in the quarter. About 84% of the recalls were for FDA Class II situations—cases where there is no immediate danger of death or injury, but still a safety concern. Stericycle’s quarterly report across all industries is available here.

In general, recalls are challenging because there are few good ways to pull back the products of certain product lots; it is often the case that all of the stock of a recalled product is dumped from pharmacy shelves, and the manufacturer races to restock. Lot-level tracking, as specified under the Drug Supply Chain Security Act (DSCSA), is improving this situation and in theory the recall process will be manageable down to individual units when DSCSA is fully implemented in 2023.

“We've witnessed recall activity fluctuate across industries in recent quarters, and companies never know when their product will be next,” said Michael Good, VP, Stericycle ExpertSolutions. “It is crucial for businesses of all types and sizes to update their recall plans and prepare in advance to avoid potential consequences with both regulators and customers.”