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Submitted By - Vishakha Choudhary
A Brief Historyof theTylenol Poisonings
Psychologists called the killer so strange that their normal guidelines "just don't work." And now,
more than 26 years after Tylenol capsules laced with potassium cyanide killed seven people in the
Chicago area, the Tylenol murders still have enough people scratching their heads that the FBI
reopened the case and is taking a fresh look at old suspects.
The murders started in September 1982, when the parents of Mary Kellerman gave the 12-year-
old a painkiller when she woke up complaining of a cold. She died hours later. Postal worker Adam
Janus died in another Chicago suburb later that morning. Janus' brother and his brother's wife,
complaining of headaches while mourning Adam, died too. In a few days the death toll grew —
the only link being that each victim had taken Extra-Strength Tylenol.
On testing, each of the capsules proved to be laced with potassium cyanide at a level toxic enough
to provide thousands of fatal doses. Police were baffled — the pills came from different production
plants and were sold in different drug stores around the Chicago area. Their conclusion was that
someone was most likely tampering with the drug on the store shelves. The deaths set off a
nationwide panic, as stores rushed to remove Tylenol from their shelves and worried consumers
overwhelmed hospitals and poison control hotlines. Chicago police went through the streets with
loudspeakers, warning residents of the dangers of taking Tylenol. Johnson & Johnson, the drug's
manufacturer, spent millions of dollars recalling the pills from stores.
The tampering inspired hundreds of copycat incidents across the U.S. The Food and Drug
Administration tallied more than 270 different incidents of product tampering in the month
following the Tylenol deaths. Pills tainted with everything from rat poison to hydrochloric acid
sickened people around the country. Some copycats expanded to food tampering: that Halloween,
parents reported finding sharp pins concealed in candy corn and candy bars. Some communities
banned trick-or-treating all together.
Police never arrested anyone for the original Tylenol murders, but tax consultant James
Lewis wrote a letter to Tylenol's manufacturer in October 1982 demanding $1 million to "stop the
killings." Lewis had a strange past. He had been charged with a 1978 Kansas City murder after
police found the remains of one of his former clients in bags in his attic; charges were dropped
after a judge ruled that the police search of Lewis' home was illegal. But police could never tie
him to the Tylenol killings and he denied committing them. Lewis was convicted of extortion for
the letter and spent more than 12 years in federal prison. Richard Brzeczek, the Chicago police
superintendent at the time, said it was unlikely Lewis would ever be prosecuted for the killings
themselves.
But when the FBI reopened their investigation in early February, the focus shifted back to Lewis.
His Cambridge, Mass. office was searched as well as a storage unit he had rented nearby. The FBI
has been tightlipped about the reason for the search and haven't named Lewis in conjunction with
the reopened investigation. Police still have some of the tainted Tylenol capsules from the original
killings and are hopeful some DNA can be recovered from the pills for testing.
The killings did have a measurable, positive impact, however: a revolution in product safety
standards. In the wake of the Tylenol poisonings, pharmaceutical and food industries dramatically
improved their packaging, instituting tamperproof seals and indicators and increasing security
controls during the manufacturing process. The result has been a dramatic reduction in the number
of copycat incidents — although it may be of little solace to the families of the seven killed in
Chicago. But now, as the FBI brings modern technology to bear on a case long gone cold, perhaps
they can hope again for something else tangible: at long last, some criminal charges.
Tylenol capsules are removed from the
shelves of a drug store after reports of
tampering in February of 1986
Source:
http://content.time.com/time/nation/article/0,8599,1878063,00.html#
The Tylenol Crisis could teach us about
crises management
For the past week Israeli press has been overflowing with accounts of dangerous bacteria being
detected in the production facilities of major food companies: first in Unilever/Telma breakfast
cereal plants, and upon the heels of that case, those of the Hanasich tehina production company
that supplied salad products to various companies and outlets.
Regardless of whether or not criminal negligence can be proven, these cases were characterized
by reticence to take responsibility, assumptions on the part of the producers that damage was
minimal and would pass, the release of conflicting announcements, withholding (or covering up)
critical information, and when matters were discovered, a focus on damage control and media
tactics, together with (as I can establish at the time of writing) a failure to adopt a comprehensive
strategic plan which would include rectification and rehabilitation.
The successful way in which in which Johnson and Johnson managed the 1982 Tylenol medicine
tampering crisis can offer valuable lessons for us today. That tragic incident, which claimed the
lives of seven innocent victims, caused nation-wide panic and prompted PR experts to doubt
whether J&J would ever be able to overcome the setback. The company’s response has been
studied as a model of successful crisis management. It stands in sharp contrast to the way the
current Israeli food crises were handled, and its successful outcome may provide a road map for
the handling of future crises and a way for rehabilitating some of the brands sullied in the current
crisis.
In the fall of 1982 an assassin in the Chicago area introduced massive doses of cyanide into a
number of Extra-Strength Tylenol bottles, several in Chicago-area pharmacies. The random
poisonings killed seven individuals (including two family members of an initial victim, who
consumed the lethal capsules at the home of the victim). Once the connection was made to Tylenol,
pandemonium broke loose.
Though the J&J subsidiary that manufactured Tylenol (McNeil Consumer products) presented
clear evidence that the tampering could not have taken place at its plant and was the work of
someone operating in the Chicago region (the tainted medicines were manufactured in different
factories and the poison was found in different batches, and only in pharmacies in the Chicago
area, which suggested post-production tampering), J&J placed the safety and well-being of the
public as its highest priority. True to the company credo that emphasized primary responsibility to
those who used its products, James E. Burke, chairman of J&J’s board of directors, adopted a
strategy of total transparency and a pro-active policy to protect the health and safety of Tylenol
users, regardless of the cost involved.
The company claimed full responsibility and, in a first stage, immediately warned the public not
to consume any form of Tylenol and ceased production of Tylenol capsules. The company
cooperated fully with police, health authorities and the media, and took a proactive stance. Burke
gave high-profile media interviews, the company ran ads warning about the danger and established
a hotline to dispense information.
Despite evidence that only a small number of pharmacies in the Chicago area may have been at
risk, Burke decided (against the opinions of his economic advisers, the FDA and FBI) to recall all
Tylenol capsules nationwide – a total of 31 million bottles, at an expense of over a hundred million
dollars. A company advertising campaign offered to replace all capsules with untainted Tylenol
“tablets” at a sizable discount (at further expense of several million dollars). These actions caused
customers and the media to view J&J as a company that could be trusted.
Parallel to these damage control efforts a crisis management team at the production subsidiary
sprung into action and began drafting a longer-term strategic rehabilitation plan for “the days
after.” Company spokespersons communicated with the workers to explain to them exactly what
had taken place and assure them of the company’s faith in their professionalism and dedication.
These employees, in turn, served as sources of information for their immediate family, their
neighbors and the medical community.
Every crisis contains a hidden opportunity. The crisis management team in the Tylenol Crisis
immediately studied the lessons learned and drafted a longer-term rehabilitation plan. Though
there were those who questioned whether the Tylenol brand name should be used in future pain-
relief products, Burke judged that the brand equity was sufficiently strong to overcome this
setback.
Within a month the company producers devised a unique, foolproof non-tamper bottle for which
it alone held the patent, and redistributed Tylenol “caplets” in this new package at a discount.
The launch was featured at a press conference and fully supported by a pro-active media and PR
plan directed at all stakeholders, workers, the public and the medical community. The result is
history. The company’s good name was not only preserved but sales increased. Tylenol remains
today a household word, and the company’s safety measures became the standard for the drug
industry.
What lessons can the Tylenol crisis teach the companies involved? Crisis planning should take
place before a crisis erupts. Though the exact nature of an individual crisis may not be divined
beforehand, the general lines such crises may take are evident and can be planned for. When one
does break out, take full responsibility. Demonstrate by word and deed remorse, concern and
compassion for your customers’ health and well-being. Cooperate fully with all health and
government authorities. Adopt concrete measures to rectify all shortcomings. Communicate these
changes actively and transparently, in an unwavering, unified message. Communicate with your
workers and involve them in your PR efforts. Undertake immediately a long-term strategic
rehabilitation plan that will feature safe, quality products at substantial savings.
Following the measures Johnson and Johnson adopted 34 years ago may enable the companies
involved in the present crises to surmount (or at least mitigate) their difficulties and reestablish
credibility among consumers.
Source: http://www.jpost.com/Opinion/The-Tylenol-Crisis-could-teach-us-
about-crises-management-464274
Can Johnson & Johnson Get Its Act
Together?
LITTLE red flags jut out from the shelves at a CVS drugstore in suburban Boston, alerting
shoppers to shortages of nearly a dozen Johnson & Johnson products. Among them are Motrin,
Rolaids, children’s Tylenol liquid and adult Tylenol, Mylanta, Pepcid AC and even some
Neutrogena skin care products.
“Looking for Tylenol pain relief products?” asks one of the signs. The notices at CVS serve as a
stark reproof to Johnson & Johnson, whose brands have for more than a century been synonymous
with quality. Some of its products are in short supply at drugstores and supermarkets because the
McNeil Consumer Healthcare unit of J.& J. last year recalled about 288 million items, including
about 136 million bottles of liquid Tylenol, Motrin, Zyrtec and Benadryl for infants and children.
Johnson & Johnson has had to recall such a variety of products because of quality-control problems
across product lines, in multiple factories and in several units last year. Some of its consumer
products, for instance, may have contained bits of metal. Others came in bottles with a moldy
smell. And some products have gone missing from stores with hardly an explanation. All of this
has put the company and its manufacturing under the intense scrutiny of lawmakers and officials
at the Food and Drug Administration.
“It looks like a plane spinning out of control,” says David Vinjamuri, a former J.& J. marketing
employee who now trains brand managers at his company, ThirdWay Brand Trainers.
While the drugstore signs that helpfully suggest “Try CVS/pharmacy brand” are intended to assist
frustrated shoppers in identifying alternatives to missing brand-name products, they also serve as
constant reminders of another of J.& J.’s continuing problems: It must persuade millions of
disappointed customers to once again pay a premium for products that may no longer seem to be
of any higher quality than the less expensive store brand.
“I don’t even consider buying them any more,” says Thien-Kim Lam, a mother of two and
a blogger in Silver Spring, Md. In a post last spring titled “Makers of Tylenol, I’m Disappointed
in You” on the blog DC Metro Moms, Ms. Lam wrote about the huge recall of J.& J. infants’ and
children’s medicines.
Now, she says, the frequent recalls have prompted her to switch to generic cold and cough
medicines for her children. “It’s like a breakup,” she says. “I’m done. I’ve moved on.”
Bonnie Jacobs, a McNeil spokeswoman, says the company is committed to restoring McNeil’s
reputation as a world-class manufacturer of over-the-counter medicines. “We will invest the
necessary resources and make whatever changes are needed to do so, and we will take the time to
do it right,” she wrote in an e-mail last Thursday.
If Queen Elizabeth II had been the chief executive of Johnson & Johnson, she might have called
2010 an “annus horribilis.”
J.& J.’s troubles with some of its consumer products began in earnest last January, when McNeil
recalled millions of pill bottles after some consumers complained that they smelled like mold. By
December, when it recalled 13 million packages of Rolaids soft chews that may have been
contaminated with metal or wood particles, the company had closed one plant in Fort Washington,
Pa., for an overhaul and had yet to solve the quality problems at another, in Puerto Rico.
The response of J.& J.’s chief executive, William C. Weldon, has been to allocate more than $100
million to upgrade McNeil’s plants and equipment, appoint new manufacturing executives, hire a
third-party consulting firm to improve procedures and systems at McNeil and shore up quality
control companywide. In Congressional testimony last fall, he promised that when the
Pennsylvania plant reopened, it would “represent the state of the art in medicine production.” And
he has repeatedly tried to reassure consumers, as he did when he promised that J.& J. had “no
higher concern than providing parents with the highest-quality products for their children.”
Those reassurances, however, have been followed by yet more recalls. What is most perplexing is
the seeming inability of executives to solve — and satisfactorily explain — the manufacturing
issues that dog the company. Federal regulators have continued to fault the McNeil unit for failing
to identify and address systemic problems at its plants, and consumers remain mystified about why
simple products like O.B. tampons can disappear from drugstore shelves.
In July, McNeil submitted a plan to the F.D.A. detailing how it intends to overhaul its operations.
To comply with regulatory standards, McNeil is undertaking thorough manufacturing and quality-
control reviews for all its products, Ms. Jacobs says.
That means the recalls may continue. Last Thursday, Ms. Jacobs said the company would “take
whatever steps are needed to ensure our products meet quality standards, including further recalls
if warranted.”
Only a day later, McNeil recalled 47 million units of Sudafed, Sinutab, Benadryl and other drugs
from wholesalers because of issues like inadequate equipment cleaning practices. The company
said that the recalls were not a result of health problems and that consumers could continue to use
the products.
JOHNSON & JOHNSON, with about $62 billion in sales in 2009, makes thousands of different
kinds of products, including Band-Aids, baby shampoo, cardiac stents and advanced drug
treatments for rheumatoid arthritis. It solidified a reputation for product quality with a company
credo, dating from 1943, saying that the company owed its first responsibility to the mothers and
fathers, doctors, nurses and patients who use its products.
With such a diversity of products and operating companies, Johnson & Johnson’s overall business
has not suffered significantly. But the string of recent recalls at McNeil threatens to weaken the
kind of trust that made many people willing to pay more for J.& J. brands.
“Nothing is more valuable to Johnson & Johnson than the brand bond of trust with consumers,”
says Erik Gordon, a professor at the Ross School of Business at the University of Michigan. “But
this is almost like, ‘If it’s an even-numbered day, it’s time for another quality problem at Johnson
& Johnson.’ ”
And, as the signs in CVS indicate, competitors — whether drugstore brands or other household
names like Advil from Pfizer or Triaminic from Novartis — have muscled into the shelf space
vacated while J.& J. puts its plants in order. In the year ended on Dec. 26, for example, sales of
children’s liquid Tylenol and Motrin decreased 60 percent or more while drugstore brands have
gained 93 percent, according to the SymphonyIRI Group, a market research firm that tracks mass-
market sales excluding those at Wal-Mart.
Mark Mandel, a father in Chicago, says his family previously bought infants’ Tylenol and Motrin
drops on the assumption that the branded products were of better quality than generics. But to
regain his business now, Mr. Mandel says, J.& J. would have to demonstrate that it had better
manufacturing standards.
“There were reasons we weren’t buying generics before,” says Mr. Mandel, a microbiologist at the
Feinberg School of Medicine at Northwestern. “But they are lower than the concerns we have
about Johnson & Johnson right now.”
YouGov BrandIndex, a market research firm that tracks consumer attitudes, says it has noticed a
steady, albeit not steep, erosion over the last 18 months in how consumers perceive not just drug
brands like Tylenol but also J.& J. While many consumers are still loyal, says Ted Marzilli, a
senior executive at the firm, the company needs to avoid death by a thousand cuts.
“They’ve really got to stop the bleeding,” Mr. Marzilli says. “What the company really needs to
do is not have any more recalls for six months, nine months, 12 months.”
Ms. Jacobs says the company intends to “build back our brands by producing the reliable, high-
quality products that consumers expect of us and we expect of ourselves.”
Consumers have typically been willing to forgive a brand for one incident or product problem,
industry analysts say, if a company acts swiftly to rectify the situation and to issue an apology —
as J.& J. did in 1982 when seven people died in the Chicago area after a tampering incident in
which Tylenol was laced with cyanide.
The most recent recalls of Tylenol and other products have been more of an inconvenience to
consumers than a serious health risk. Federal officials have said there was no evidence that
deficiencies in the recalled products caused severe illness or death.
But the number and variety of problems have stirred concern among government officials and
consumers that the McNeil unit has suffered from a systemic breakdown of its manufacturing
procedures. Last May, the House Committee on Oversight and Government Reform opened an
investigation into the recalls.
Questions are still swirling around another event, described by some House committee members
as a “phantom recall,” in 2009 — in which McNeil hired outside contractors to quietly buy back
certain defective Motrin products from store shelves. The products did not dissolve properly, a
problem that could cause the pills to work less effectively.
Last week, the state of Oregon filed a lawsuit accusing Johnson & Johnson and McNeil of
misrepresenting the quality and efficacy of those products.
“They did not want the negative publicity that would come with admitting they had a defective
product, the negative publicity that comes with any recall,” John Kroger, Oregon’s attorney
general, said.
Ms. Jacobs of McNeil said the unit’s actions “were consistent with applicable law, and there was
no health or safety risk to consumers associated with this limited recall.”
The company disputed the allegations, she said, and would seek to have the lawsuit dismissed.
But Mr. Weldon, while saying that he believed McNeil had acted with good intentions, has
emphasized that in retrospect, the company should have handled things differently.
“This episode was not a model for how I would like to see Johnson & Johnson companies approach
problems with defective products when they arise,” he said during Congressional testimony last
September.
NOTHING better illustrates Johnson & Johnson’s difficulties in remedying McNeil’s woes — and
the longstanding frustration of federal regulators — than the events at the company’s plant in Las
Piedras, Puerto Rico. Consumers started complaining as early as April 2008 about moldy-smelling
Tylenol arthritis caplets that they said nauseated them or gave them stomach problems.
McNeil did not alert the F.D.A. until September 2009 and then didn’t start a substantial recall until
December 2009 — during an F.D.A. inspection of the plant, according to F.D.A. documents.
In January 2010, the agency sent a warning letter to Peter Luther, the president of McNeil,
complaining that the company’s initial investigation “was unjustifiably delayed and terminated
prematurely.” It said that even though consumers had also complained about a moldy smell in
Rolaids and Extra-Strength Tylenol, the company had not widened its investigation to include
those products.
Only after the F.D.A. inspection did McNeil executives recall millions of bottles of Tylenol,
Motrin, Benadryl and other pills. The company identified an unusual source for the moldy odor:
chemical contamination from a byproduct of a pesticide used to treat wooden pallets. It has since
stopped using the pallets.
The F.D.A. says the company should have acted faster. “When something smells bad literally or
figuratively, companies must aggressively investigate and take all necessary actions to solve the
problem,” said Deborah M. Autor, director of the office of compliance at the F.D.A. Center for
Drug Evaluation and Research, during a press conference last year.
But Johnson & Johnson executives say that identifying the root cause of the problem was a difficult
and lengthy process. Indeed, F.D.A. documents indicated that the consumer complaints subsided
for a time in 2008 — leading the company to conclude the issue had gone away — only to resume
months later.
In a letter to the agency last February, Mr. Luther, the McNeil president, explained that the odor
issue was an extremely unusual problem. The investigation, he wrote, had been challenging
because there were very few research labs able to test for the chemical later identified as the cause
of the smell. McNeil, he assured the F.D.A., was making changes in the ways that it handled
consumer complaints, conducted investigations and notified the agency.
Last October, McNeil recalled yet another lot of Tylenol because consumers again complained of
an odor, and the next month in an inspection report, the F.D.A. cited additional lapses at the Puerto
Rico plant.
McNeil says that it has been working diligently to ensure that its manufacturing operations meet
F.D.A. standards and that it plans to address the agency’s most recent concerns.
J.& J.’s troubles have not been limited to its over-the-counter products, which could suggest that
the company may suffer from even broader problems. Last year, its DePuy medical device unit
recalled two kinds of hip implants, affecting tens of thousands of patients worldwide. Its vision
care unit recalled millions of soft contact lenses sold abroad.
A shareholder lawsuit filed last month against Johnson & Johnson’s directors, meanwhile, catalogs
a long list of “federal and state regulatory investigations, subpoenas and requests for documents,
F.D.A. warning letters, news articles and the recall of products accounting for hundreds of millions
of dollars of corporate losses.”
Ms. Jacobs says the company intends to defend itself in court.
THE manufacturing problems over the last year have clearly cost J.& J. In the third quarter, overall
consumer sales in the United States fell 25 percent, to $1.3 billion from $1.7 billion for the same
period in 2009, but sales of over-the-counter medicines and nutritional products declined about 40
percent, to $438 million, the company said. The company plans to report fourth-quarter results
later this month.
While the company is estimating that the total hit to sales in 2010 from problems at the
Pennsylvania plant is likely to be around $600 million, it has begun reintroducing only a few of
the products that were once available. Executives say they hope to get more of the missing
medicines back on the shelves by the middle of this year and to reopen the plant by year-end.
Although some in the industry are optimistic that the company can quickly regain its perch, some
Wall Street analysts are not convinced. This month, Goldman Sachs lowered its 2011 earnings
estimates for the company, partly because of the time it might require to bring the closed plant up
to the F.D.A.’s standards.
“We believe recovery could be slower than expected,” Jami Rubin, a Goldman analyst, warned
investors, noting that generic alternatives may now be entrenched with consumers.
Nor has the company improved its communication with the public. Last year, drugstores across
the country started running out of O.B. tampons, a product made by McNeil-P.P.C., another
company unit.
The product shortage — and limited information provided by the company about the reasons
behind the supply problem — caused even louder howls of frustration among some women than
the children’s medicine recall.
“It was like a brick wall,” says Susan Pickin, a mother of a 5-year-old daughter in Manhattan,
describing her phone conversation with a McNeil customer service representative. The
conversation, Ms. Pickin says, left her wondering whether the company had permanently retired
the tampons because of a safety issue or whether the items might soon reappear in stores.
Ms. Jacobs, the McNeil spokeswoman, says the company discontinued the most absorbent of the
products, called “Ultra,” last year, but that there had been no unusual reports of health problems.
The company has begun shipping other O.B. products, now available in some stores.
Ms. Jacobs declined to explain the nature of the supply disruptions that caused the shortage.
THE variety, magnitude and duration of the manufacturing and quality problems perplex some
industry watchers.
“This is really unusual to have this gross systemic failure,” says Donald Riker, the editor of OTC
Product News, an industry newsletter on over-the-counter drugs.
The reasons for McNeil’s woes remain unclear. Some critics, including former employees, say
Johnson & Johnson has lost sight of its credo, while others suggest that the company decentralized
its oversight of manufacturing and quality control in error.
Others say it was simply a matter of cost-cutting. The December lawsuit, for example, cited two
unnamed former employees who contended that the company failed to address the manufacturing
problems at McNeil because it was trying to save money.
Other former employees who are not involved in the lawsuit say that J.& J. seemed to hesitate in
recent years to invest in new manufacturing equipment.
“It takes a lot of money to buy equipment and maintain quality,” says Patrick Bols, who left
Johnson & Johnson’s pharmaceutical division in the late 1990s and owns stock in the company.
McNeil declined to comment on what specifically led to its manufacturing troubles. But Ms.
Jacobs said the company was taking steps to address all the factors that could have contributed.
Since last summer, the company has met the monthly goals it set in its overhaul plan submitted to
the F.D.A. And Johnson & Johnson has since revamped and centralized its quality-control
operations, naming a longtime executive to oversee a new system of quality control across the
corporation and to report directly to Mr. Weldon.
Even some critics say Johnson & Johnson seems to be taking steps to remedy its problems. “It
takes a while,” Mr. Bols says, “to get it right again.”
Source: http://www.nytimes.com/2011/01/16/business/16johnson-and-johnson.html
Chicago Tylenol murders remain unsolved
after more than 30 years
CHICAGO – The unsolved investigation into the deaths of seven people who swallowed cyanide-
laced Tylenol is returning to where it started more than 30 years ago, as a group of Illinois law
enforcement agencies said Friday that the FBI will no longer lead the probe.
Police in Arlington Heights — where three of the victims died — announced in a news release that
a task force made up of their department along with the Illinois State Police and police departments
in Chicago, Elk Grove Village, Lombard, Schaumburg and Winfield will run the investigation.
The FBI will continue to "provide resources in areas of expertise as needed to support the
investigation," according to the release, adding that task force will also work with prosecutors'
offices in Cook County and DuPage County.
"The investigation is ongoing, and it continues to be active," said Arlington Heights Police
Commander Mike Hernandez. He said the logistics about what each agency will do still has to be
worked out.
Friday's announcement comes two days shy of the 31st anniversary of the day people who'd taken
Extra Strength Tylenol started to die of cyanide poisoning.
In a space of three days beginning Sept. 29, 1982, seven people who took cyanide-laced Tylenol
in Chicago and four suburbs died. That triggered a national scare that prompted an untold number
of people to throw medicine away and stores nationwide to pull Tylenol from their shelves.
In recent years, the case has taken a number of twists. In 2009, federal agents searched the Boston-
area home of James W. Lewis, who once served 12 years in prison for sending an extortion note
to Tylenol maker Johnson & Johnson demanding $1 million to "stop the killing." Lewis, who along
with his wife gave DNA samples and fingerprints to investigators, denied any involvement in the
poisonings. After the investigation that included a seizure of boxes, files and a computer from
Lewis' Cambridge, Massachusetts, home he was never charged.
Then in 2011, the FBI took a DNA sample from the so-called Unabomber, Ted Kaczynski.
Kaczynski, who grew up in the Chicago area and whose parents lived in the suburbs in 1982 when
the Tylenol slayings occurred, denied in court papers that he ever "possessed any potassium
cyanide" — the poison used — and he has not been charged. At the time, his lawyer suggested the
FBI wanted Kaczynski's DNA simply to rule him out as a suspect and not because agents believed
he was involved.
As for the slayings themselves, the details of the deaths of the six adults and one 12-year-old girl
have faded from memory. But much like the terrorist attacks of 9/11 resulted in new security
measures in airports, the poisonings resulted in additional security measures taken in the packaging
of food, drink and medicine to prevent tampering.
Source: http://www.foxnews.com/us/2013/09/28/chicago-tylenol-murders-remain-unsolved-
after-more-than-30-years.html
J&J Pays $25M to Settle Recall Probe, But a Key
Plant Remains Offline
In a bid to resolve a long-running and controversial saga, the Johnson & Johnson unit that sells
over-the-counter medicines has agreed to plead guilty to a misdemeanor and pay a criminal fine
of $20 million for selling adulterated infant and children products. The McNeil subsidiary also
agreed to forfeit $5 million, according to the U.S. Department of Justice.
The move comes six years after McNeil first received complaints about unusual particles in bottles
of Infants’ Tylenol, but failed to conduct needed investigations to determine the cause or how to
prevent a recurrence, according to the feds. There were, in fact, “numerous other instances” in
which McNeil subsequently failed to initiate or complete a so-called corrective action plan (see
the plea agreement and information sheet).
The problems prompted the FDA to conduct a series of inspections and McNeil began a string of
embarrassing recalls of tens of millions of bottles of various products, including versions of Motrin
made for infants and children. The events contributed to a sustained slowdown in sales for the
McNeil unit, which had traditionally been a reliable source of revenue.
The developments sparked a congressional hearing into J&J handling of quality-control issues.
During a closely watched appearance before Congress, former J&J CEO Bill Weldon
acknowledged missteps, notably a ‘phantom recall’ in which J&J initially hired consultants to
remove products from store shelves without ordering an official recall.
The episode placed J&J on the defensive as the health care giant struggled to overcome
deteriorating confidence among consumers, physicians and investors. In response, J&J replaced
some McNeil executives, scrutinized board oversight of J&J management to satisfy shareholder
lawsuits and retained armies of consultants to retool a key manufacturing plant that was at the
center of the scandal.
The problems tarnished the reputation of a company that had been widely hailed for its handling
of the 1982 Tylenol scare in which several people died after taking the over-the-counter painkiller.
Although the capsules had been laced with cyanide, the crime was never solved. J&J quickly
recalled all Tylenol products and its approach to the crisis became a revered case study in business
schools.
By reaching the plea agreement, J&J is hoping to put the more recent problems behind it. A McNeil
spokeswoman sent Pharmalot a statement saying the agreement “fully and finally resolves the
federal government’s investigation and closes a chapter on action that led the company to review
and significantly improve its procedures.”
The episode is not entirely over, though. That key manufacturing plant, which is located in Fort
Washington, Pa., is still not back in service. As part of a consent decree reached in 2011 with the
feds, J&J has been attempting to rehabilitate the facility and says that a third party manufacturing
expert has submitted written certification to the FDA that it conforms with regulatory
requirements.
J&J has been laboring to revive the Pennsylvania plant, which also happens to be where McNeil
is headquartered. Three years ago, J&J execs indicated the plant would reopen the following year
but had to delay its revival. Since then, the health care giant has been more discreet and refused to
make projections about when the facility would resume production. Other U.S. facilities continue
to operate, but under a permanent injunction with the feds.
Attorney General Eric Holder Delivers Remarks at the Johnson & Johnson Press Conference
Source: http://blogs.wsj.com/pharmalot/2015/03/11/jj-pays-25m-to-settle-recall-probe-but-
a-key-plant-remains-offline/

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Operations management

  • 1. Submitted By - Vishakha Choudhary
  • 2. A Brief Historyof theTylenol Poisonings Psychologists called the killer so strange that their normal guidelines "just don't work." And now, more than 26 years after Tylenol capsules laced with potassium cyanide killed seven people in the Chicago area, the Tylenol murders still have enough people scratching their heads that the FBI reopened the case and is taking a fresh look at old suspects. The murders started in September 1982, when the parents of Mary Kellerman gave the 12-year- old a painkiller when she woke up complaining of a cold. She died hours later. Postal worker Adam Janus died in another Chicago suburb later that morning. Janus' brother and his brother's wife, complaining of headaches while mourning Adam, died too. In a few days the death toll grew — the only link being that each victim had taken Extra-Strength Tylenol. On testing, each of the capsules proved to be laced with potassium cyanide at a level toxic enough to provide thousands of fatal doses. Police were baffled — the pills came from different production plants and were sold in different drug stores around the Chicago area. Their conclusion was that someone was most likely tampering with the drug on the store shelves. The deaths set off a nationwide panic, as stores rushed to remove Tylenol from their shelves and worried consumers overwhelmed hospitals and poison control hotlines. Chicago police went through the streets with loudspeakers, warning residents of the dangers of taking Tylenol. Johnson & Johnson, the drug's manufacturer, spent millions of dollars recalling the pills from stores. The tampering inspired hundreds of copycat incidents across the U.S. The Food and Drug Administration tallied more than 270 different incidents of product tampering in the month following the Tylenol deaths. Pills tainted with everything from rat poison to hydrochloric acid sickened people around the country. Some copycats expanded to food tampering: that Halloween,
  • 3. parents reported finding sharp pins concealed in candy corn and candy bars. Some communities banned trick-or-treating all together. Police never arrested anyone for the original Tylenol murders, but tax consultant James Lewis wrote a letter to Tylenol's manufacturer in October 1982 demanding $1 million to "stop the killings." Lewis had a strange past. He had been charged with a 1978 Kansas City murder after police found the remains of one of his former clients in bags in his attic; charges were dropped after a judge ruled that the police search of Lewis' home was illegal. But police could never tie him to the Tylenol killings and he denied committing them. Lewis was convicted of extortion for the letter and spent more than 12 years in federal prison. Richard Brzeczek, the Chicago police superintendent at the time, said it was unlikely Lewis would ever be prosecuted for the killings themselves. But when the FBI reopened their investigation in early February, the focus shifted back to Lewis. His Cambridge, Mass. office was searched as well as a storage unit he had rented nearby. The FBI has been tightlipped about the reason for the search and haven't named Lewis in conjunction with the reopened investigation. Police still have some of the tainted Tylenol capsules from the original killings and are hopeful some DNA can be recovered from the pills for testing. The killings did have a measurable, positive impact, however: a revolution in product safety standards. In the wake of the Tylenol poisonings, pharmaceutical and food industries dramatically improved their packaging, instituting tamperproof seals and indicators and increasing security controls during the manufacturing process. The result has been a dramatic reduction in the number of copycat incidents — although it may be of little solace to the families of the seven killed in Chicago. But now, as the FBI brings modern technology to bear on a case long gone cold, perhaps they can hope again for something else tangible: at long last, some criminal charges. Tylenol capsules are removed from the shelves of a drug store after reports of tampering in February of 1986 Source: http://content.time.com/time/nation/article/0,8599,1878063,00.html#
  • 4. The Tylenol Crisis could teach us about crises management For the past week Israeli press has been overflowing with accounts of dangerous bacteria being detected in the production facilities of major food companies: first in Unilever/Telma breakfast cereal plants, and upon the heels of that case, those of the Hanasich tehina production company that supplied salad products to various companies and outlets. Regardless of whether or not criminal negligence can be proven, these cases were characterized by reticence to take responsibility, assumptions on the part of the producers that damage was minimal and would pass, the release of conflicting announcements, withholding (or covering up) critical information, and when matters were discovered, a focus on damage control and media tactics, together with (as I can establish at the time of writing) a failure to adopt a comprehensive strategic plan which would include rectification and rehabilitation. The successful way in which in which Johnson and Johnson managed the 1982 Tylenol medicine tampering crisis can offer valuable lessons for us today. That tragic incident, which claimed the lives of seven innocent victims, caused nation-wide panic and prompted PR experts to doubt whether J&J would ever be able to overcome the setback. The company’s response has been studied as a model of successful crisis management. It stands in sharp contrast to the way the current Israeli food crises were handled, and its successful outcome may provide a road map for the handling of future crises and a way for rehabilitating some of the brands sullied in the current crisis. In the fall of 1982 an assassin in the Chicago area introduced massive doses of cyanide into a number of Extra-Strength Tylenol bottles, several in Chicago-area pharmacies. The random poisonings killed seven individuals (including two family members of an initial victim, who consumed the lethal capsules at the home of the victim). Once the connection was made to Tylenol, pandemonium broke loose.
  • 5. Though the J&J subsidiary that manufactured Tylenol (McNeil Consumer products) presented clear evidence that the tampering could not have taken place at its plant and was the work of someone operating in the Chicago region (the tainted medicines were manufactured in different factories and the poison was found in different batches, and only in pharmacies in the Chicago area, which suggested post-production tampering), J&J placed the safety and well-being of the public as its highest priority. True to the company credo that emphasized primary responsibility to those who used its products, James E. Burke, chairman of J&J’s board of directors, adopted a strategy of total transparency and a pro-active policy to protect the health and safety of Tylenol users, regardless of the cost involved. The company claimed full responsibility and, in a first stage, immediately warned the public not to consume any form of Tylenol and ceased production of Tylenol capsules. The company cooperated fully with police, health authorities and the media, and took a proactive stance. Burke gave high-profile media interviews, the company ran ads warning about the danger and established a hotline to dispense information. Despite evidence that only a small number of pharmacies in the Chicago area may have been at risk, Burke decided (against the opinions of his economic advisers, the FDA and FBI) to recall all Tylenol capsules nationwide – a total of 31 million bottles, at an expense of over a hundred million dollars. A company advertising campaign offered to replace all capsules with untainted Tylenol “tablets” at a sizable discount (at further expense of several million dollars). These actions caused customers and the media to view J&J as a company that could be trusted. Parallel to these damage control efforts a crisis management team at the production subsidiary sprung into action and began drafting a longer-term strategic rehabilitation plan for “the days after.” Company spokespersons communicated with the workers to explain to them exactly what had taken place and assure them of the company’s faith in their professionalism and dedication. These employees, in turn, served as sources of information for their immediate family, their neighbors and the medical community.
  • 6. Every crisis contains a hidden opportunity. The crisis management team in the Tylenol Crisis immediately studied the lessons learned and drafted a longer-term rehabilitation plan. Though there were those who questioned whether the Tylenol brand name should be used in future pain- relief products, Burke judged that the brand equity was sufficiently strong to overcome this setback. Within a month the company producers devised a unique, foolproof non-tamper bottle for which it alone held the patent, and redistributed Tylenol “caplets” in this new package at a discount. The launch was featured at a press conference and fully supported by a pro-active media and PR plan directed at all stakeholders, workers, the public and the medical community. The result is history. The company’s good name was not only preserved but sales increased. Tylenol remains today a household word, and the company’s safety measures became the standard for the drug industry. What lessons can the Tylenol crisis teach the companies involved? Crisis planning should take place before a crisis erupts. Though the exact nature of an individual crisis may not be divined beforehand, the general lines such crises may take are evident and can be planned for. When one does break out, take full responsibility. Demonstrate by word and deed remorse, concern and compassion for your customers’ health and well-being. Cooperate fully with all health and government authorities. Adopt concrete measures to rectify all shortcomings. Communicate these changes actively and transparently, in an unwavering, unified message. Communicate with your workers and involve them in your PR efforts. Undertake immediately a long-term strategic rehabilitation plan that will feature safe, quality products at substantial savings. Following the measures Johnson and Johnson adopted 34 years ago may enable the companies involved in the present crises to surmount (or at least mitigate) their difficulties and reestablish credibility among consumers.
  • 8. Can Johnson & Johnson Get Its Act Together? LITTLE red flags jut out from the shelves at a CVS drugstore in suburban Boston, alerting shoppers to shortages of nearly a dozen Johnson & Johnson products. Among them are Motrin, Rolaids, children’s Tylenol liquid and adult Tylenol, Mylanta, Pepcid AC and even some Neutrogena skin care products. “Looking for Tylenol pain relief products?” asks one of the signs. The notices at CVS serve as a stark reproof to Johnson & Johnson, whose brands have for more than a century been synonymous with quality. Some of its products are in short supply at drugstores and supermarkets because the McNeil Consumer Healthcare unit of J.& J. last year recalled about 288 million items, including about 136 million bottles of liquid Tylenol, Motrin, Zyrtec and Benadryl for infants and children.
  • 9. Johnson & Johnson has had to recall such a variety of products because of quality-control problems across product lines, in multiple factories and in several units last year. Some of its consumer products, for instance, may have contained bits of metal. Others came in bottles with a moldy smell. And some products have gone missing from stores with hardly an explanation. All of this has put the company and its manufacturing under the intense scrutiny of lawmakers and officials at the Food and Drug Administration. “It looks like a plane spinning out of control,” says David Vinjamuri, a former J.& J. marketing employee who now trains brand managers at his company, ThirdWay Brand Trainers. While the drugstore signs that helpfully suggest “Try CVS/pharmacy brand” are intended to assist frustrated shoppers in identifying alternatives to missing brand-name products, they also serve as constant reminders of another of J.& J.’s continuing problems: It must persuade millions of disappointed customers to once again pay a premium for products that may no longer seem to be of any higher quality than the less expensive store brand. “I don’t even consider buying them any more,” says Thien-Kim Lam, a mother of two and a blogger in Silver Spring, Md. In a post last spring titled “Makers of Tylenol, I’m Disappointed in You” on the blog DC Metro Moms, Ms. Lam wrote about the huge recall of J.& J. infants’ and children’s medicines. Now, she says, the frequent recalls have prompted her to switch to generic cold and cough medicines for her children. “It’s like a breakup,” she says. “I’m done. I’ve moved on.” Bonnie Jacobs, a McNeil spokeswoman, says the company is committed to restoring McNeil’s reputation as a world-class manufacturer of over-the-counter medicines. “We will invest the necessary resources and make whatever changes are needed to do so, and we will take the time to do it right,” she wrote in an e-mail last Thursday. If Queen Elizabeth II had been the chief executive of Johnson & Johnson, she might have called 2010 an “annus horribilis.” J.& J.’s troubles with some of its consumer products began in earnest last January, when McNeil recalled millions of pill bottles after some consumers complained that they smelled like mold. By December, when it recalled 13 million packages of Rolaids soft chews that may have been contaminated with metal or wood particles, the company had closed one plant in Fort Washington, Pa., for an overhaul and had yet to solve the quality problems at another, in Puerto Rico. The response of J.& J.’s chief executive, William C. Weldon, has been to allocate more than $100 million to upgrade McNeil’s plants and equipment, appoint new manufacturing executives, hire a third-party consulting firm to improve procedures and systems at McNeil and shore up quality control companywide. In Congressional testimony last fall, he promised that when the Pennsylvania plant reopened, it would “represent the state of the art in medicine production.” And he has repeatedly tried to reassure consumers, as he did when he promised that J.& J. had “no higher concern than providing parents with the highest-quality products for their children.”
  • 10. Those reassurances, however, have been followed by yet more recalls. What is most perplexing is the seeming inability of executives to solve — and satisfactorily explain — the manufacturing issues that dog the company. Federal regulators have continued to fault the McNeil unit for failing to identify and address systemic problems at its plants, and consumers remain mystified about why simple products like O.B. tampons can disappear from drugstore shelves. In July, McNeil submitted a plan to the F.D.A. detailing how it intends to overhaul its operations. To comply with regulatory standards, McNeil is undertaking thorough manufacturing and quality- control reviews for all its products, Ms. Jacobs says. That means the recalls may continue. Last Thursday, Ms. Jacobs said the company would “take whatever steps are needed to ensure our products meet quality standards, including further recalls if warranted.” Only a day later, McNeil recalled 47 million units of Sudafed, Sinutab, Benadryl and other drugs from wholesalers because of issues like inadequate equipment cleaning practices. The company said that the recalls were not a result of health problems and that consumers could continue to use the products. JOHNSON & JOHNSON, with about $62 billion in sales in 2009, makes thousands of different kinds of products, including Band-Aids, baby shampoo, cardiac stents and advanced drug treatments for rheumatoid arthritis. It solidified a reputation for product quality with a company credo, dating from 1943, saying that the company owed its first responsibility to the mothers and fathers, doctors, nurses and patients who use its products. With such a diversity of products and operating companies, Johnson & Johnson’s overall business has not suffered significantly. But the string of recent recalls at McNeil threatens to weaken the kind of trust that made many people willing to pay more for J.& J. brands. “Nothing is more valuable to Johnson & Johnson than the brand bond of trust with consumers,” says Erik Gordon, a professor at the Ross School of Business at the University of Michigan. “But this is almost like, ‘If it’s an even-numbered day, it’s time for another quality problem at Johnson & Johnson.’ ” And, as the signs in CVS indicate, competitors — whether drugstore brands or other household names like Advil from Pfizer or Triaminic from Novartis — have muscled into the shelf space vacated while J.& J. puts its plants in order. In the year ended on Dec. 26, for example, sales of children’s liquid Tylenol and Motrin decreased 60 percent or more while drugstore brands have gained 93 percent, according to the SymphonyIRI Group, a market research firm that tracks mass- market sales excluding those at Wal-Mart. Mark Mandel, a father in Chicago, says his family previously bought infants’ Tylenol and Motrin drops on the assumption that the branded products were of better quality than generics. But to regain his business now, Mr. Mandel says, J.& J. would have to demonstrate that it had better manufacturing standards.
  • 11. “There were reasons we weren’t buying generics before,” says Mr. Mandel, a microbiologist at the Feinberg School of Medicine at Northwestern. “But they are lower than the concerns we have about Johnson & Johnson right now.” YouGov BrandIndex, a market research firm that tracks consumer attitudes, says it has noticed a steady, albeit not steep, erosion over the last 18 months in how consumers perceive not just drug brands like Tylenol but also J.& J. While many consumers are still loyal, says Ted Marzilli, a senior executive at the firm, the company needs to avoid death by a thousand cuts. “They’ve really got to stop the bleeding,” Mr. Marzilli says. “What the company really needs to do is not have any more recalls for six months, nine months, 12 months.” Ms. Jacobs says the company intends to “build back our brands by producing the reliable, high- quality products that consumers expect of us and we expect of ourselves.” Consumers have typically been willing to forgive a brand for one incident or product problem, industry analysts say, if a company acts swiftly to rectify the situation and to issue an apology — as J.& J. did in 1982 when seven people died in the Chicago area after a tampering incident in which Tylenol was laced with cyanide. The most recent recalls of Tylenol and other products have been more of an inconvenience to consumers than a serious health risk. Federal officials have said there was no evidence that deficiencies in the recalled products caused severe illness or death. But the number and variety of problems have stirred concern among government officials and consumers that the McNeil unit has suffered from a systemic breakdown of its manufacturing procedures. Last May, the House Committee on Oversight and Government Reform opened an investigation into the recalls. Questions are still swirling around another event, described by some House committee members as a “phantom recall,” in 2009 — in which McNeil hired outside contractors to quietly buy back certain defective Motrin products from store shelves. The products did not dissolve properly, a problem that could cause the pills to work less effectively. Last week, the state of Oregon filed a lawsuit accusing Johnson & Johnson and McNeil of misrepresenting the quality and efficacy of those products. “They did not want the negative publicity that would come with admitting they had a defective product, the negative publicity that comes with any recall,” John Kroger, Oregon’s attorney general, said. Ms. Jacobs of McNeil said the unit’s actions “were consistent with applicable law, and there was no health or safety risk to consumers associated with this limited recall.” The company disputed the allegations, she said, and would seek to have the lawsuit dismissed. But Mr. Weldon, while saying that he believed McNeil had acted with good intentions, has emphasized that in retrospect, the company should have handled things differently.
  • 12. “This episode was not a model for how I would like to see Johnson & Johnson companies approach problems with defective products when they arise,” he said during Congressional testimony last September. NOTHING better illustrates Johnson & Johnson’s difficulties in remedying McNeil’s woes — and the longstanding frustration of federal regulators — than the events at the company’s plant in Las Piedras, Puerto Rico. Consumers started complaining as early as April 2008 about moldy-smelling Tylenol arthritis caplets that they said nauseated them or gave them stomach problems. McNeil did not alert the F.D.A. until September 2009 and then didn’t start a substantial recall until December 2009 — during an F.D.A. inspection of the plant, according to F.D.A. documents. In January 2010, the agency sent a warning letter to Peter Luther, the president of McNeil, complaining that the company’s initial investigation “was unjustifiably delayed and terminated prematurely.” It said that even though consumers had also complained about a moldy smell in Rolaids and Extra-Strength Tylenol, the company had not widened its investigation to include those products. Only after the F.D.A. inspection did McNeil executives recall millions of bottles of Tylenol, Motrin, Benadryl and other pills. The company identified an unusual source for the moldy odor: chemical contamination from a byproduct of a pesticide used to treat wooden pallets. It has since stopped using the pallets. The F.D.A. says the company should have acted faster. “When something smells bad literally or figuratively, companies must aggressively investigate and take all necessary actions to solve the problem,” said Deborah M. Autor, director of the office of compliance at the F.D.A. Center for Drug Evaluation and Research, during a press conference last year. But Johnson & Johnson executives say that identifying the root cause of the problem was a difficult and lengthy process. Indeed, F.D.A. documents indicated that the consumer complaints subsided for a time in 2008 — leading the company to conclude the issue had gone away — only to resume months later. In a letter to the agency last February, Mr. Luther, the McNeil president, explained that the odor issue was an extremely unusual problem. The investigation, he wrote, had been challenging because there were very few research labs able to test for the chemical later identified as the cause of the smell. McNeil, he assured the F.D.A., was making changes in the ways that it handled consumer complaints, conducted investigations and notified the agency. Last October, McNeil recalled yet another lot of Tylenol because consumers again complained of an odor, and the next month in an inspection report, the F.D.A. cited additional lapses at the Puerto Rico plant. McNeil says that it has been working diligently to ensure that its manufacturing operations meet F.D.A. standards and that it plans to address the agency’s most recent concerns. J.& J.’s troubles have not been limited to its over-the-counter products, which could suggest that the company may suffer from even broader problems. Last year, its DePuy medical device unit
  • 13. recalled two kinds of hip implants, affecting tens of thousands of patients worldwide. Its vision care unit recalled millions of soft contact lenses sold abroad. A shareholder lawsuit filed last month against Johnson & Johnson’s directors, meanwhile, catalogs a long list of “federal and state regulatory investigations, subpoenas and requests for documents, F.D.A. warning letters, news articles and the recall of products accounting for hundreds of millions of dollars of corporate losses.” Ms. Jacobs says the company intends to defend itself in court. THE manufacturing problems over the last year have clearly cost J.& J. In the third quarter, overall consumer sales in the United States fell 25 percent, to $1.3 billion from $1.7 billion for the same period in 2009, but sales of over-the-counter medicines and nutritional products declined about 40 percent, to $438 million, the company said. The company plans to report fourth-quarter results later this month. While the company is estimating that the total hit to sales in 2010 from problems at the Pennsylvania plant is likely to be around $600 million, it has begun reintroducing only a few of the products that were once available. Executives say they hope to get more of the missing medicines back on the shelves by the middle of this year and to reopen the plant by year-end. Although some in the industry are optimistic that the company can quickly regain its perch, some Wall Street analysts are not convinced. This month, Goldman Sachs lowered its 2011 earnings estimates for the company, partly because of the time it might require to bring the closed plant up to the F.D.A.’s standards. “We believe recovery could be slower than expected,” Jami Rubin, a Goldman analyst, warned investors, noting that generic alternatives may now be entrenched with consumers. Nor has the company improved its communication with the public. Last year, drugstores across the country started running out of O.B. tampons, a product made by McNeil-P.P.C., another company unit. The product shortage — and limited information provided by the company about the reasons behind the supply problem — caused even louder howls of frustration among some women than the children’s medicine recall. “It was like a brick wall,” says Susan Pickin, a mother of a 5-year-old daughter in Manhattan, describing her phone conversation with a McNeil customer service representative. The conversation, Ms. Pickin says, left her wondering whether the company had permanently retired the tampons because of a safety issue or whether the items might soon reappear in stores. Ms. Jacobs, the McNeil spokeswoman, says the company discontinued the most absorbent of the products, called “Ultra,” last year, but that there had been no unusual reports of health problems. The company has begun shipping other O.B. products, now available in some stores. Ms. Jacobs declined to explain the nature of the supply disruptions that caused the shortage.
  • 14. THE variety, magnitude and duration of the manufacturing and quality problems perplex some industry watchers. “This is really unusual to have this gross systemic failure,” says Donald Riker, the editor of OTC Product News, an industry newsletter on over-the-counter drugs. The reasons for McNeil’s woes remain unclear. Some critics, including former employees, say Johnson & Johnson has lost sight of its credo, while others suggest that the company decentralized its oversight of manufacturing and quality control in error. Others say it was simply a matter of cost-cutting. The December lawsuit, for example, cited two unnamed former employees who contended that the company failed to address the manufacturing problems at McNeil because it was trying to save money. Other former employees who are not involved in the lawsuit say that J.& J. seemed to hesitate in recent years to invest in new manufacturing equipment. “It takes a lot of money to buy equipment and maintain quality,” says Patrick Bols, who left Johnson & Johnson’s pharmaceutical division in the late 1990s and owns stock in the company. McNeil declined to comment on what specifically led to its manufacturing troubles. But Ms. Jacobs said the company was taking steps to address all the factors that could have contributed. Since last summer, the company has met the monthly goals it set in its overhaul plan submitted to the F.D.A. And Johnson & Johnson has since revamped and centralized its quality-control operations, naming a longtime executive to oversee a new system of quality control across the corporation and to report directly to Mr. Weldon. Even some critics say Johnson & Johnson seems to be taking steps to remedy its problems. “It takes a while,” Mr. Bols says, “to get it right again.” Source: http://www.nytimes.com/2011/01/16/business/16johnson-and-johnson.html
  • 15. Chicago Tylenol murders remain unsolved after more than 30 years CHICAGO – The unsolved investigation into the deaths of seven people who swallowed cyanide- laced Tylenol is returning to where it started more than 30 years ago, as a group of Illinois law enforcement agencies said Friday that the FBI will no longer lead the probe. Police in Arlington Heights — where three of the victims died — announced in a news release that a task force made up of their department along with the Illinois State Police and police departments in Chicago, Elk Grove Village, Lombard, Schaumburg and Winfield will run the investigation. The FBI will continue to "provide resources in areas of expertise as needed to support the investigation," according to the release, adding that task force will also work with prosecutors' offices in Cook County and DuPage County. "The investigation is ongoing, and it continues to be active," said Arlington Heights Police Commander Mike Hernandez. He said the logistics about what each agency will do still has to be worked out. Friday's announcement comes two days shy of the 31st anniversary of the day people who'd taken Extra Strength Tylenol started to die of cyanide poisoning. In a space of three days beginning Sept. 29, 1982, seven people who took cyanide-laced Tylenol in Chicago and four suburbs died. That triggered a national scare that prompted an untold number of people to throw medicine away and stores nationwide to pull Tylenol from their shelves. In recent years, the case has taken a number of twists. In 2009, federal agents searched the Boston- area home of James W. Lewis, who once served 12 years in prison for sending an extortion note to Tylenol maker Johnson & Johnson demanding $1 million to "stop the killing." Lewis, who along with his wife gave DNA samples and fingerprints to investigators, denied any involvement in the poisonings. After the investigation that included a seizure of boxes, files and a computer from Lewis' Cambridge, Massachusetts, home he was never charged. Then in 2011, the FBI took a DNA sample from the so-called Unabomber, Ted Kaczynski. Kaczynski, who grew up in the Chicago area and whose parents lived in the suburbs in 1982 when the Tylenol slayings occurred, denied in court papers that he ever "possessed any potassium cyanide" — the poison used — and he has not been charged. At the time, his lawyer suggested the FBI wanted Kaczynski's DNA simply to rule him out as a suspect and not because agents believed he was involved. As for the slayings themselves, the details of the deaths of the six adults and one 12-year-old girl have faded from memory. But much like the terrorist attacks of 9/11 resulted in new security measures in airports, the poisonings resulted in additional security measures taken in the packaging of food, drink and medicine to prevent tampering. Source: http://www.foxnews.com/us/2013/09/28/chicago-tylenol-murders-remain-unsolved- after-more-than-30-years.html
  • 16. J&J Pays $25M to Settle Recall Probe, But a Key Plant Remains Offline In a bid to resolve a long-running and controversial saga, the Johnson & Johnson unit that sells over-the-counter medicines has agreed to plead guilty to a misdemeanor and pay a criminal fine of $20 million for selling adulterated infant and children products. The McNeil subsidiary also agreed to forfeit $5 million, according to the U.S. Department of Justice. The move comes six years after McNeil first received complaints about unusual particles in bottles of Infants’ Tylenol, but failed to conduct needed investigations to determine the cause or how to prevent a recurrence, according to the feds. There were, in fact, “numerous other instances” in which McNeil subsequently failed to initiate or complete a so-called corrective action plan (see the plea agreement and information sheet). The problems prompted the FDA to conduct a series of inspections and McNeil began a string of embarrassing recalls of tens of millions of bottles of various products, including versions of Motrin made for infants and children. The events contributed to a sustained slowdown in sales for the McNeil unit, which had traditionally been a reliable source of revenue. The developments sparked a congressional hearing into J&J handling of quality-control issues. During a closely watched appearance before Congress, former J&J CEO Bill Weldon acknowledged missteps, notably a ‘phantom recall’ in which J&J initially hired consultants to remove products from store shelves without ordering an official recall. The episode placed J&J on the defensive as the health care giant struggled to overcome deteriorating confidence among consumers, physicians and investors. In response, J&J replaced some McNeil executives, scrutinized board oversight of J&J management to satisfy shareholder lawsuits and retained armies of consultants to retool a key manufacturing plant that was at the center of the scandal. The problems tarnished the reputation of a company that had been widely hailed for its handling of the 1982 Tylenol scare in which several people died after taking the over-the-counter painkiller. Although the capsules had been laced with cyanide, the crime was never solved. J&J quickly
  • 17. recalled all Tylenol products and its approach to the crisis became a revered case study in business schools. By reaching the plea agreement, J&J is hoping to put the more recent problems behind it. A McNeil spokeswoman sent Pharmalot a statement saying the agreement “fully and finally resolves the federal government’s investigation and closes a chapter on action that led the company to review and significantly improve its procedures.” The episode is not entirely over, though. That key manufacturing plant, which is located in Fort Washington, Pa., is still not back in service. As part of a consent decree reached in 2011 with the feds, J&J has been attempting to rehabilitate the facility and says that a third party manufacturing expert has submitted written certification to the FDA that it conforms with regulatory requirements. J&J has been laboring to revive the Pennsylvania plant, which also happens to be where McNeil is headquartered. Three years ago, J&J execs indicated the plant would reopen the following year but had to delay its revival. Since then, the health care giant has been more discreet and refused to make projections about when the facility would resume production. Other U.S. facilities continue to operate, but under a permanent injunction with the feds. Attorney General Eric Holder Delivers Remarks at the Johnson & Johnson Press Conference