Sam Uretsky

Rebranding No Substitute for Regulation

It’s hard to keep track. Some day there may be a Jeopardy question — put them in order: Wall Street, Toyota, BP, McNeil. The order may be by date, or maybe size, although we still don’t know if the BP disaster will cause more damage than the Wall Street debacle, but as a quiz show question, the challenge will be to remember where McNeil fits in — but it does fit the pattern.

McNeil Consumer Products is a division of Johnson & Johnson, and the maker of Tylenol, Motrin, Zyrtec and Benadryl products. Recently, McNeil issued a “voluntary” recall of millions of bottles of these popular products. According to the company: Some of the products included in the recall may contain a higher concentration of active ingredient than is specified; others may contain inactive ingredients that may not meet internal testing requirements; and others may contain tiny particles. There’s no indication that anybody has been harmed by these products, but it’s clear that the company hasn’t been meeting the proper manufacturing standards.

First, these deviations from the proper standard should never have gotten into the products, and once they did get in, they should have been caught by Quality Control and never have left the plant.

These products are made in the United States, but distributed in the United States, Canada, Dominican Republic, Dubai (UAE), Fiji, Guam, Guatemala, Jamaica, Puerto Rico, Panama, Trinidad & Tobago and Kuwait.

When the problems were found in the McNeil products, the FDA recommended that people switch from the national brands to house brands, but then Perrigo, a major manufacturer of house brand drugs, got a warning letter of its own, because metal shavings had been found in its version of ibuprofen, the generic version of Motrin and Advil.

In an inspection report of the McNeil plant dated April 19-30, the Food & Drug Administration inspectors wrote: “QA and Compliance Department overall responsibilities per the firm’s deficient as follows: It does not maintain adequate laboratory facilities for testing and approval (or rejection) of components and drug products; it neglects review and approval of validation protocols regarding changes in product processes and equipment to determine when revalidation is or should be warranted; it is default in investigations, tracking, trending and maintenance of consumer

complaint follow-up; and it lacks trending of products, components (i.e., water), and complaints to demonstrate a broad perspective to assure plant conformance with CGMPs.” (Current Good Manufacturing Practices)

Congress is investigating, but some of the information that has already been released seems damning. Dr. Joshua M. Sharfstein, deputy commissioner of the FDA reported that in 2008, McNeil, having found problems with its products, didn’t report them to the FDA and institute a recall, but, rather, hired an outside company to quietly remove the bad lots from drug store shelves. Similarly, in 2008, McNeil received reports of a moldy smell in products made at a plant in Puerto Rico, but delayed notifying the FDA until the following year. The moldy smell was traced to a chemical used to treat the wood in the transport pallets, which had leached into the raw material.

The problem gets down to an inability to trust the maker of one of the best-known, and most-respected brands in the country, and even in the world (in 2005, J&J was 91st on the list of the top 100 brands worldwide, behind Shell, but ahead of Levi’s and Starbuck’s). For years, people have been saying Tylenol instead of acetaminophen, bad for protecting trademarks, but an indication of trust all the same. People have also been willing to pay extra for Tylenol-brand acetaminophen, even with the generic right next to it on the shelf. Now it’s obvious the trust was misplaced.

All the facts aren’t in yet, but according to press reports, there seems to have been a pattern of corporate culture in each of these examples, a willingness to take risks without considering the size of the risk involved. BP may have used a type of pipe that would install more quickly, but with increased risk of a blowout, while McNeil seems to have cut back on quality control and quality assurance, while the banks were lending money to people whom they knew couldn’t pay. And, while it’s easy to say in retrospect that we need more regulation, we also have to get away from being business friendly, concerned that properly enforced

regulation will inhibit business and cost jobs. Corporations have been able to get what they want — looser regulations, lower taxes, public financing — by threatening to take their plants elsewhere. But the banks were only able to sell mortgage-backed bonds because they had an Aaa rating from Moody’s and McNeil could charge more for Tylenol brand acetaminophen because of an implied higher quality. Toyota lived on its reputation as well.

Other nations have shown that regulation can be an assurance of quality, and a selling point: Swiss watches, French Cognac and Champagne. Considering what being business-friendly has gotten us, this might be a good time to rebrand made in USA.

Sam Uretsky is a writer and pharmacist living on Long Island, N.Y. Email sdu01@mail.com. The opinions are his own.

From The Progressive Populist, July 1-15, 2010