Johnson & Johnson takes another hit

This time, the problem isn't with Tylenol but with its delivery method.

By Kim Peterson Feb 17, 2012 3:40PM
Image: Boy hiding eyes (© Ned Frisk Photography/Corbis)Just when it seemed Johnson & Johnson (JNJ) was getting its act together after a series of damaging recalls, it flubs again.

The company is recalling 574,000 bottles of grape-flavored Tylenol for children younger than 2 years old. You can read more about the recall here.

There's nothing wrong with the medicine. The problem is with the new system whereby parents stick a plastic dosing syringe into a small hole to draw out the liquid Tylenol. About 17 parents or caregivers complained that when they inserted the syringe, the doughnut-shaped cover fell into the bottle.

And that began yet another recall for Johnson & Johnson's McNeil Consumer Healthcare division, which has suffered 25 product recalls since 2009. Among the recalls were versions of Tylenol, Motrin, Benadryl and Zyrtec.

Johnson & Johnson's manufacturing process came under intense scrutiny from Congress, regulatory agencies and parents. The Food & Drug Administration told parents to stop using the products and mentioned concerns over "tiny particles" in them and inactive ingredients that may not have met quality standards. Health regulators took over supervision of three of J&J's manufacturing plants.

Parents fled the brand. Pediatricians began recommending generic products. It was an absolute disaster for a company that built a reputation as a reliable provider of health and consumer products. McNeil's U.S. sales plummeted to $1.4 billion last year, less than half of the $3.1 billion seen in 2008, The Wall Street Journal reports.

Many Tylenol products have been off the shelves for at least a year. The new infant Tylenol was just returned to the market in November, and now there's no telling when it will come back.

The troubles in the McNeil division are far from over. In fact, a few weeks ago the company replaced the top two lieutenants it had put in charge of turning the unit around. One of those leaving was just put in charge of McNeil last April.

The problems at McNeil are one reason Johnson & Johnson's 2011 profit fell to $9.7 billion from $13.3 billion in 2010. Sales rose 5.6% to $65 billion, but nearly across the board, U.S. sales were in decline, while international sales rose.

McNeil is just a small part of Johnson & Johnson, however. The company's pharmaceutical sales rose to a whopping $24 billion last year, while its medical devices and diagnostics unit saw sales rise to nearly $26 billion.

Still, analysts are concerned about the company's coming year, and many slashed expectations for 2012 after Johnson & Johnson disappointed investors with its forecast for earnings of between $5.05 and $5.15 per share. Analysts were expecting $5.21.

Investors had hoped this was the year that Johnson & Johnson could clean up McNeil and re-introduce Tylenol as a brand consumers could trust. The latest recall puts a dent in those hopes.

Tags: JNJ
6Comments
Feb 17, 2012 11:07PM
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Dennis,

There is no such thing as a Government Health Care Regulator.  The regulators were more than likely from the FDA to ensure  the products being manufactured were safe.  As for regulating the health care industry, before the reigns were loosened in the mid 90's my monthly insurance cost was manageable.  After the that the costs soared and now most people roll the dice with their health because of cost concerns.

Maybe if someone was supervising big Industry like Health Care, Oil, Banks   none of the ills that all those before mentioned interests would have occured.  i.e. Gulf Spill, Exorbitant health insurance and access costs, billions of dollars lost for people who were invested for retirement.   If anything it is the best argument for supervision, being a parent I know that when the kids can't handle the task a little supervision is needed.  

Dennis please stop misinforming people or if that is not the case at least inform yourself on how things work because it is dangerous to spread information that seems plausible but in reality is false

Feb 17, 2012 5:18PM
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Angelina, did I miss something in the article that associated J&J with the current Republican Presidential Candidate campaigns that promulgated your remark?

Could it possibly have been caused by the fact that the article states that, "Health regulators took over supervision of three of J&J's manufacturing plants."   They would be GOVERNMENT Health Care Regulators, would they not?.  Just wait until they take over "SUPERVISING" the rest of the health care industry!
Feb 18, 2012 7:35PM
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Kim....Bottom line,any Company that has 25 recalls in 2 years....Needs to get BIT and bit hard.

 

When and if, it comes to Children....The division should be shut down.

 

And I'm just an old Grandpa and G-Grampa.

 

You will realize what I'm talking about......Some Day.

Feb 18, 2012 7:37PM
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And some of you other basturds, are just sick pukes.
Feb 17, 2012 4:49PM
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Evidently it is not as effective a contraceptive as Bayer aspirin.
Feb 17, 2012 5:18PM
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Or you could just go to the White House and have an abortion. I hear Obama likes to watch!
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