Q4 2015 Stericycle Recall Index cites influx of drugs entering market and mergers and acquisitions as factors.
Stericycle ExpertSOLUTIONS™ released the findings of its Q4 2015 Stericycle Recall Index. The report highlighted the complexities surrounding the pharmaceutical industry, especially as it pertains to counterfeit drugs, mergers and acquisitions (M&A), and regulatory shifts.
The Q4 Index noted that 2015 saw significant change in the industry, with a huge influx of legitimate and counterfeit drugs introduced to the market. The Food and Drug Administration (FDA) approved 45 new medications in 2015—more than double the number approved just ten years ago. The counterfeit drug industry, worth roughly $200 billion annually, also continues to grow. According to the FDA, this trend is due to the large quantity of high-cost drugs, advancements in manufacturing technologies that make it easier to create counterfeits, and the proliferation of Internet drug purchases. These trends make it challenging from a recall perspective, as companies facing a recall need to first determine if it’s actually their drug that needs to be removed from the market.
“In 2015, the pharmaceutical industry faced challenges on several new fronts,” said Kevin Pollack, Vice President, Stericycle ExpertSOLUTIONS. “The regulatory burden continued to evolve and the explosion of counterfeit drugs presented manufacturers with many new issues. The full measure of this remains to be seen, but these trends will likely impact recalls in 2016 and beyond. Those brands that are prepared and proactive will have the advantage.”
Consolidation was another major theme identified in the Q4 Index, with a record number of M&A deals in 2015, totaling $687 billion in the U.S. alone. According to the data, there were 50 FDA pharmaceutical recalls in Q4, down 25 percent from Q3, and fewer companies experienced a recall in 2015. While the number of companies has decreased, the consolidation brings a new set of problems. M&A activity puts pressure on businesses to combine resources, such as merging disparate tracking systems and quality control mechanisms. This adds heightened sensitivities and changes to the pharmaceutical supply chain, and ultimately to recall plans.
With continuing global supply chain complexities and increasing drug development, the pharmaceutical industry will be watching new legislation closely. The pending 21st Century Cures Act would accelerate the approval process for certain drugs, which could make the increase in FDA approvals the start of a major trend. As a result, the potential for a recall has never been higher.
“As complexities increase, navigating the global pharmaceutical environment has never been more difficult—and this is a trend we expect to continue,” said Pollack. “Recall preparedness is more important than ever. Companies must have a method for tracking and consolidating critical data to ensure compliant regulatory reporting. As we’ve seen in recent years, it’s not a matter of if a recall hits, it’s a matter of when.”
The report can be accessed in its entirety here.