Able Laboratories recalled its entire line of generic drugs in 2005. Seven years later, Novartis recalled over 1,600 lots of Excedrin, NoDoz, Bufferin, and Gas-X. Just last year, RB recalled 1.5 million bottles of its congestion and cold medicine, Mucinex. These types of recalls can have massive and devastating impacts on company profits. It has been shown that any recall will negatively impact share price and brand perception, especially with consumer over-the-counter products with lowered switching costs. The immediate costs involved to investigate, retrieve, and destroy flawed products are significant, but the corresponding future costs on lost revenue and market share are felt on the bottom line. These manufacturers can also face consumer litigation and damages to brand reputation that negatively affect business long after the recall occurs. In a worst case scenario, like in Able Laboratories’ case, a recall can lead to a company shutting its doors for good.
For long-term profitability and sustainability, manufacturers need to use the right tools and procedures to manage and mitigate recalls. Many manufacturers already employ quality control measures via enterprise quality management systems to comply with traceability regulations. The data acquired through these processes can serve a secondary purpose during a recall.
Traceability data contain manufacturing details from raw materials origin and production dates to lot numbers and distribution channels. With this information, manufacturers attain visibility across the lifecycle of a product and can pinpoint and isolate the root cause of a recall problem. Further, they can determine which products were affected and identify where the affected products were shipped so retailers know exactly which products to pull off the shelves. This also minimizes revenue loss on unaffected items.
In today’s landscape of big data, there are many options to affect change. These are three ways in particular that manufacturers can use quality control practices to support traceability and hasten the resolution of a recall.
1. Visibility from Raw Materials to Finished Goods
Pharmaceutical manufacturers have stringent quality checks within their own four walls, but the same level of scrutiny may not be instituted at their suppliers’ plants. This lack of conformity has led to a large number of quality issues throughout history that can be traced to problems with raw materials from suppliers. For example, the 2008 recall of Baxter’s blood thinner products was caused by contaminated raw heparin material from a Chinese supplier. Pfizer’s 2016 Children’s Advil recall was also caused by an issue with a supplier’s ingredient. With this in mind, manufacturers cannot rely on a Certificate of Analysis (COA) alone for quality assurance. Real-time visibility into supplier operations allows manufacturers to identify and correct quality issues as they occur, avoiding shipping costs on returned products.
Cloud-based enterprise quality management technology enables manufacturers to link suppliers with corporate quality initiatives, regardless of geography. Data input via the suppliers’ local browsers sync with the manufacturer’s centralized database and allow quality, supply chain, and operational professionals to monitor quality checks on raw materials and ingredients before they ship. This not only ensures a high-quality final product, but also increases the throughput of the global supply chain while avoiding recalls on product characteristics that were not included on a COA.
2. Historical Production Data
As part of quality control, pharmaceutical manufacturers collect specific data—regulatory checks, product specifications, and environmental information like air pressure and temperature—at every step of production. With a cloud-based enterprise quality management system, manufacturers can store these data points from multiple plants and suppliers in a single, centralized repository. They can then “roll up” and aggregate the data to look at quality across the entire enterprise.
In the event that there are problems resulting from the products, manufacturers can look to the historical production data to provide a record of that product’s lifecycle. This allows quality professionals to accurately identify the root cause of the problem, such as a specification variance, foreign objects, or allergens, and determine exactly which products were affected.
3. Centralized Supply Chain Data
When discussing pharmaceutical recalls, it’s hard to ignore the 1982 landmark recall by Johnson & Johnson, when the company recalled all of its Tylenol products following several cases of cyanide poisoning. While the cause turned out to be tampering after the bottles reached store shelves, Johnson & Johnson wanted to remove any uncertainty about the quality of its products on the market and removed every single bottle. It was a large and expensive endeavor that involved 31 million bottles of Tylenol with a retail value of more than $100 million.
Companies today can minimize the potentially exorbitant costs of recalls by identifying the affected products and only pulling them off store shelves. The unaffected products remain in store for purchase to avoid unnecessary revenue loss.
With proper quality control measures in place, pharmaceutical companies can use centralized supply chain data to trace specific products from raw materials to delivery or vice versa from finished product back to raw materials. For example, if there is a product quality issue from a supplier, a company can trace the affected raw material lot codes through manufacturing operations to find what lines and batches incorporated the bad raw material. Then, the manufacturer can follow those batches through distribution and to the retailers to ensure only those specific products are pulled from the shelf. So, rather than enduring the costly act of recalling every product, only lost revenue and scrap expenses for the affected products are incurred. The results are immensely less expensive.
While no pharmaceutical manufacturer wants to face a recall, the best defense is a good offense. In making sure proper quality control and traceability measures are in place, pharmaceutical companies can swiftly identify the root cause of an issue—whether it is a supplier’s raw material quality or a variance in specification—and remove defective products from the supply chain. How efficiently companies act can help re-establish consumer confidence in their brands and mitigate the financial burden of a recall.
Author the Author
Doug Fair is the Chief Operating Officer for InfinityQS International, Inc., the data, technology, and manufacturing experts that create enterprise visibility and promote global transformation. Fair oversees the company’s global business operations and helps clients understand statistical methods and implement InfinityQS’ enterprise quality management software. Prior to joining InfinityQS in 1997, Fair began his statistical career on the manufacturing shop floor at Boeing Aerospace and spent several years as a statistical consultant to Fortune 500 companies. A senior member of the American Society for Quality and a Six Sigma Black Belt, Fair possesses a degree in Industrial Statistics from the University of Tennessee, and has coauthored two books on the same topic.