The Tylenol Crisis
The year is 1982. Cyanide is injected by an unidentified person into some of the Tylenol medications, which are detected as purchased from supermarket drug shelves in Chicago. As a result, seven people lost their lives. When and where the injection is performed is unknown.
At that time, Tylenol is the most widely used pain relievers throughout the US with 37% market share.
Subsequently, a panic among the public is emerged and being heard across the country. Because, Chicago is also a brand city and attracts a lot of attention for this reason. In the days following the event, market share drops to 7%.
FBI officials contact with Johnson & Johnson management, the manufacturer company. They say that this is an isolated event and it is clear that the event realized by a person who has mental health problems or wants the company to kneel on. They recommended that it is unnecessary to withdraw the drugs from the market.
But Bill Weldon, the CEO, is not in same mind about this issue with the FBI. Since the issue is related to public health and there is a state mention in Mission Statement, it was decided to stop the production and advertising, recall all the drugs from the market (31 million boxes) and declare the situation by using all national written and visual media. (According to the Mission Statement written in the middle of 1940’s, it was written in the first line of the first paragraph that “We are responsible to doctors, nurses, patients, mothers, children, namely, who are using our drug.”)
Production is stopped without losing any time. Product is recalled from the market and the situation is declared via all national written and visual media. Public awareness is tried to be provided about not to use the related drugs. Essentially, case is isolated event and the dominant opinion is that there is no direct relation with Manufacturing and Supply Chain of company. Despite the high cost, the firm shows an ethical behavior, which most companies do not show and take the necessary actions since the issue, is associated with human life, exactly.
Shortly, new product launches into market with a secured package against external intervention through 3 phases (Package is designed as to be revealing any external intervention.) This level of security is not implemented by any company until then. Tylenol Crisis also led to significant improvements in the packaging process in the pharmaceutical industry.
While the product is entering into market again, it was tried to achieve former market share by using various marketing tools and the cost was higher than the expected. Also, it was provided to change the former drugs with new ones. Former market share was 37% and this decreased into 7% just next week after the event. But it increased to 46% about 100 days after the event. Because public trusts to Johnson & Johnson and the related drug has a security level that none of opponent have. So, previous negative situation has turned into advantage with proper risk management.
An investigation is started in company from top to bottom. Meanwhile, it was revealed that one of the victim brought the drug not from supermarket but from hospital. (Hides from the public) it was investigated when and where could this be happened. According to the results of investigation, it is probably the Supply Chain Process that the related injection is realized (Distribution and packaging process). Because, the similar/closer problems are seen in 6 products. Deficits are identified and immediately corrected. Meanwhile, healthy operations were ensured by coordinating with federal health officials.
Although the company officials think that the injection is realized within Supply Chain, they declare that the injection is performed in supermarkets as FBI stated. Because, the company shall not be responsible in this case.
Later, FBI deepens its investigations and it was detected that the related intervention is performed in one of the Supplier Company. Some of them are caught but clear evidence cannot be found for any of them.
Remarkable decisions are as;
- There is a compliance with Mission statement. It was ensured that the statement not only a written text on the wall or internet web site but also applied.
- Since the issue is directly related to public health, it was assumed that the failure belongs to Company and acted without losing any time although there are no evidence and FBI officials recommended otherwise.
- It is thought what can be made to avoid such a situation and packaging approach is changed.
- It was provided to change the former drugs with new ones which are proved as to be clean.
Tylenol Crisis is one of the good examples for Risk Management.