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The Tylenol Crisis

Güncelleme tarihi: 30 Ağu 2023


The year is 1982. An unidentified person injects cyanide into some of the Tylenol medications 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 was the most widely used pain reliever in the US, with a 37% market share.


Subsequently, public panic is emerging 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 contacted Johnson & Johnson management, the manufacturer company. They say this is an isolated event, and it is clear that the event is 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 the same mind about this issue with the FBI. Since the problem is related to public health and there is a state mention in the 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 using all national written and visual media. (According to the Mission Statement written in the middle of 1940s, 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. The 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 using the related drugs. Essentially, the case is an isolated event, and the dominant opinion is that there is no direct relation with the Manufacturing and Supply Chain of the Company. Despite the high cost, the firm shows ethical behavior, which most companies do not exhibit, and takes the necessary actions since the issue is precisely associated with human life.


Shortly, new products launch into the market with a secured package against external intervention through 3 phases. (Package is designed to be revealing any external intervention.) Any company does not implement this level of security until then. The Tylenol Crisis also led to significant improvements in the packaging process in the pharmaceutical industry.


While the product is entering the market again, it tried to achieve its former market share using various marketing tools, and the cost was higher than expected. Also, it was provided to replace the former drugs with new ones. The former market share was 37%, which decreased to 7% the week after the event. But it increased to 46% about 100 days after the event. Because the public trusts Johnson & Johnson, and the related drug has a security level that none of the opponents have. So, the previous negative situation has become an advantage with proper risk management.


An investigation is started in the Company from top to bottom. Meanwhile, it was revealed that one victim brought the drug not from the supermarket but from the hospital. (Hides from the public) It was investigated when and where this could be happened. According to the results of the 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 the Supply Chain, they declare that it is performed in supermarkets, as the FBI stated, because the Company shall not be responsible in this case.


Later, the FBI deepened its investigations, and it was detected that the related intervention was performed in one of the Supplier Companies. Some of them are caught, but clear evidence cannot be found for any of them.


Remarkable decisions are as follows;
  • There is compliance with the Mission statement. It was ensured that the information was not only written text on the wall or internet website but also applied.

  • Since the issue is directly related to public health, it was assumed that the failure belonged to the Company and acted without losing time. However, there is no evidence, and FBI officials recommended otherwise.

  • What can be done to avoid such a situation and change the packaging approach?

  • It was provided to replace the former drugs with new, clean ones.


Tylenol Crisis is one of the good examples of Risk Management.

 

References

 

January 10, 2016 - İstanbul



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