Companies and Regulators are Feeling Immense Pressure to Protect Consumers
INDIANAPOLIS, Aug. 13, 2019 /PRNewswire/ -- Recalls in the second quarter remained flat across industries but serious and deadly incidents were on the rise – an indication of lagging activity by regulatory agencies, according to the second quarter 2019 Recall Index released today by Stericycle Expert Solutions (NASDAQ: SRCL).
"The numbers in this Index are just one data point in the product safety story. Over the last six months, regulators have been the target of consumer advocates, victims, and even Congress," said Chris Harvey, Director of Recall Solutions at Stericycle Expert Solutions. "Perhaps the most obvious has been the criticism lodged at the Consumer Product Safety Commission for its handling of safety-related issues. Then there are the cries for the Food and Drug Administration to act quicker on CBD and cannabis while behind the scenes food safety inspections continue to lag."
While there may be fewer regulations, the actions have been stricter and even severe according to food, drug, and medical device companies that have found themselves under scrutiny.
"The warning to companies in this regulatory environment is 'don't become the poster child.' Regulators will be looking for ways to shift the spotlight to a bad actor and show they have control," Harvey added. "So when you learn about a potential safety issue, act quickly. Consumers will applaud you for doing the right thing."
Deaths from recalled consumer products are the highest they've been since 1998. The fact that deaths were largely linked to children's products begins to shine a light on the challenges facing companies in the children's and infant product category. Products in this category, especially in big families, have a long life. They are played with by a series of children, passed along to family friends, sold as secondhand products, and end up in daycares and childcare environments. It's difficult to protect children completely in these situations.
"While the Consumer Product Safety Commission has taken the brunt of criticism for its alleged feet dragging on a variety of safety issues to date, it's important we all are reminded of our role in product safety," said Harvey. "Companies need to think through their plan for reaching the second-hand marketplace and childcare environments. But we as parents, aunts and uncles, grandparents and caregivers need to be an active part of this process."
The top reason for recalls in Q2 was cGMP deviations, and we have seen an increasing number of recalls for this reason over the last few quarters. In fact, 90 percent of units recalled were a result of cGMP deviations.
"Expect a spike in drug recalls. At the beginning of Q3, the FDA issued a warning to four repackers of active pharmaceutical ingredients (APIs) – an indication that additional action may follow," said Harvey. "So while the agency is getting criticized for dragging its feet on issues like CBD and cannabis, and regulatory inspections are lagging, the agency is getting stricter on manufacturing processes and recalls will undoubtedly follow."
Software is a weak link for medical devices, and it will only get worse. Software issues remained the top cause of recalls for the 13th straight quarter.
"As we become increasingly reliant on AI and data collection, software becomes an even bigger vulnerability for patients, physicians, and wrongdoers. If the software that is used to operate a device is inadequate, how can we be sure that it is protected from cybersecurity vulnerabilities?" Harvey asked. "Add to that the fact that companies have only recently been laser-focused on mitigating cyber threats associated with medical devices. It's a recipe for disaster."
Food & Beverage
Processed foods are no longer safer than fresh foods. For the eighth consecutive quarter, undeclared allergens was the top cause of FDA food recalls at 48.4%. Foreign material was the top cause for FDA recalled units. Among the FDA food categories impacted by recalls were prepared foods, supplements and baked goods.
"The more processed a product is, the higher the risk of contamination, adulteration, foreign material, and undeclared allergens," said Harvey. "The good news is that technology has enabled us to find contaminants and adulterants we couldn't find before. The unfortunate news is that the testing and inspections that would catch these issues hasn't been fully utilized, particularly as FDA and USDA inspections lag."
Despite the headlines, auto recalls remain flat over the last two years. While we continue to see the long-tail of OEM recalls, parts and construction of autos are safer than ever.
"The perceived increase in recalls is in part psychological," Harvey said. "We remember all recalls in this category as auto recalls, rather than an airbag or windshield wiper recall. That's why they stand out in people's minds."
The full Q2 2019 Recall Index is available at https://www.stericycleexpertsolutions.com/recall-index/.
About the Stericycle Recall Index
The Stericycle Recall Index is the only report that aggregates and tracks recall data to help manufacturers and other industry stakeholders navigate the regulatory environment and identify trends. Each quarter Stericycle analyzes data from the U.S. Consumer Product Safety Commission (CPSC), the National Highway Traffic Safety Administration (NHTSA), the FDA, and the USDA. For more information, please visit www.stericycleexpertsolutions.com/thought-leadership.
About Stericycle Expert Solutions™
Stericycle Inc. is a NASDAQ-listed global business-to-business services company which provides highly specialized solutions to healthcare and commercial businesses of all sizes. Founded in 1989, Stericycle Inc. has grown to become a leader across a range of complex and highly regulated market sectors and operates in 550 locations. Stericycle Expert Solutions™ is the industry leader in managing automotive, consumer product, pharmaceutical, medical device, juvenile product, and food and beverage recalls. Expert Solutions streamlines the entire product recall process and manages Notification & Response, Processing & Tracking, and Compliance & Reporting for leading global companies. For more information, visit www.stericycleexpertsolutions.com.