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Quality in question at Johnson & Johnson
Quality and safety are in question at one of America's most trusted companies after it recalled eight products in less than a year.
In the September 2010 issue of Fortune, Kimes reports that Johnson & Johnson recalled the eight over-the-counter drugs, including some targeted at children, all of which were made by its McNeil Consumer Healthcare division.
The author highlights quality concerns at McNeil and contrasts the handling of these latest problems with the way in which Johnson & Johnson dealt with an earlier crisis, in 1982, when Tylenol tablets were laced with poison and customers died as a result. (The perpetrator was never caught.) The company immediately pulled the medicine and devised tamper-free packaging to help to ensure that the problems did not recur. Its handling of this crisis won it plaudits - including in a Harvard Business Review case study that dissected the episode.
Kimes recounts the history of McNeil since 1982, pointing to incidents which are seen as indicating that the company's quality-assurance and product-safety processes have been increasingly put under pressure.
Since 2002, says the author, some experienced quality-control department employees have been replaced with people with less technical pharmaceutical expertise. The rigour of some investigations has been questioned, as well as sampling practices and record keeping.
Kimes also says that the 2006 merger of the Pfizer's consumer health-care division with McNeil, which shifted McNeil from Johnson & Johnson's pharma unit to its consumer sector, affected the organizational culture. Pharma bosses were steeped in the practices surrounding regulatory compliance - some of them quite costly - while the consumer unit placed more emphasis on marketing.
The author reveals that Johnson & Johnson's liquid children's drugs held around 70% of the market. The latest recalls will cost the company around $600 million in sales this year as rivals line up to grab market share. Meanwhile, Johnson & Johnson is undergoing a comprehensive overhaul to get to the bottom of its problems - buying new equipment, replacing leadership and reorganizing the quality-control department.
In Volume 36, Issue 9 of Quality World, published in September 2010, Woods reviews the development of automated quality-management approaches in the pharmaceutical and medical-device manufacturing industries. The author describes the development of a new quality-management model, named the V-model.
Devised in Germany to promote the quality of software used in government defence projects, the V-model gets its name from the fact that the process is often mapped out as a flow chart that takes the form of the letter V. The downward slope of the V covers product definition, the base of the V is implementation time and the upward slope deals with tests and integration. The V- model as a whole highlights the links between each phase of product development and its associated phase of testing. It has gained widespread acceptance because of its simplicity.
By helping to control risk in the pharmaceutical industry, the V-model can help to guarantee product quality and patient safety - two characteristics that are central to successful operation in this highly regulated sector. Just ask Johnson & Johnson.