Regulatory compliance is both an essential part of the quality journey and a catalyst for product recalls.
Companies that don’t pay attention to the regulatory compliance landscape could find themselves counting the cost of product recalls.
According to the latest quarterly index from recall solutions provider Stericycle, product recall numbers continue to rise. And while these numbers have not risen significantly in the first six months of the financial year, there is a consensus that new regulatory enforcement by federal and local agencies could see those figures increase in the not-so-distant future.
Consumer products and food continue to be most likely to be recalled, while deviation from Current Good Manufacturing Practices (CGMP) was cited by the authors of the Q2 2019 Recall Index as the top reason for pharmaceutical recalls. Software issues were a prime factor in medical device recalls, while the automotive industry – despite almost daily evidence to the contrary – has seen a slight increase in required recalls.
“With an increasing number of risks and safety issues demanding attention from short-staffed, budget-strained regulators, inspections have been lagging and recalls haven’t climbed dramatically in recent months,” said Stericycle’s director of recall solutions Chris Harvey, in a blog post. “But here’s our warning: don’t expect that to continue. Even if it does for a little while longer, make sure you proactively address issues and plan for any safety challenges so you don’t become the next poster child.”
Regulatory compliance remains key quality factor
The quarterly Stericycle Recall Index is centered around five product categories – Consumer Products, Pharmaceuticals, Medical Devices, Food and Beverage, and Automotive. Each of one of these sections within the index provides a breakdown of what factors caused the most recalls and the number of units or products effected.
The full report can be accessed here [PDF], but there are a number of product recall trends in Q2 2019 that are worth highlighting in each identified category. These are as follows:
- Children’s products were the most recalled units, with nearly 60 percent of all recalls allocated to this sector.
- A full 36 deaths were reported as being related to consumer product recalls, and entrapment or strangulation was cited as the top hazard. To put this into context, there were 36 deaths in the last 38 quarters combined. Fire, injury (undefined), burns and laceration were also related to consumer product recalls.
- Product recalls themselves increased by 97.4 percent to 77, while the total number of units recalled rose by 425 percent to 9.4 million.
- Q2 saw 919 incidents related to product recalls – a 457 percent increase from Q1 - and there were 95 injuries reported – an increase of 458.8 percent from Q1. On the plus side, the average number of recalls per quarter showed a year-on-year decrease of 10.6 percent from 2017 and 2018.
- Pharma recalls actually decreased by 18.1 percent in Q2, with the average size of a recall totaling 311,560 units. However, the number of units recalled was just under 24 million, which was double the number of recalls in Q1.
- Around 23 million of the recalled units related to Class II products – narcotics that may lead to psychological or physical dependence.
- CGMP deviations were the leading cause of recalls (22.1 percent), with failed specifications (19.5 percent) and mislabeling (15.6 percent) rounding out the top three.
- The number of overall recalls increased by 22 percent to 200, which was still lower than nine out of the previous 12 quarters. The number of recalled units decreased by 85.4 percent to 19.7 million – the lowest since Q1 2017.
- Class II recalls topped the chart, with 12,839,049 units recalled. Class 1 recalls – defined by the FDA as a situation where there is a good chance of “adverse health consequences or death” – accounted for the recall of 6,875,621 units.
- A full 69 percent of all medical device recalls were nationwide.
- Software, mislabeling, quality issues and medical devices operating outside of specifications were all reasons for recalls.
Food and Beverage
- Just under 22 percent of all FDA-generated food recalls were allocated to products that had a nationwide distribution.
- Poultry was the leading food source in terms of recalls, according to the U.S. Department of Agriculture, with 28.1 percent of all recalls. Beef (21.9 percent), pork (15.6 percent) and seafood (9.4 percent) also contributed to the recall statistics. Foreign materials were cited as a reason for 31.3 percent of recall by the USDA, while no inspection (28.1 percent) and undeclared allergens (21.9 percent) made an impact.
- Prepared foods (25 percent), produce (18 percent), supplements (14 percent) and baked goods (11 percent) were all at the top of the FDA recall list. Undeclared allergens were responsible for 48.4 percent of all FDA recalls … for the eighth consecutive quarter.
- Automobiles made up 93.1 percent of NHTSA recalls and 98.9 percent of recalled units. Average automobile recall size was 28,867 vehicles.
- Suspension problems were the top unit recall cause in Q2, although Stericycle said that the long tail of airbag recalls is still playing a significant role in the industry.
For the record, Stericycle’s index is built on cumulative data, and the quarterly report compiles and tracks this data from a variety of sources that include the four primary federal agencies that are responsible for monitoring and initiating product recalls in the United States.
Each of the four agencies – the Consumer Product Safety Commission (CPSC), the Food and Drug Administration (FDA), the Food Safety and Inspection Service (FSIS), and the National Highway Traffic Safety Administration (NHTSA) – produce recall announcements on a regular basis and every agency allocates its own criteria in terms of enforcement, incident reporting and the recall process itself.
Quality Products Are Rarely Recalled
With that in mind, this quarterly index is a fascinating snapshot of the product recall and - by association – compliance landscape. Product recall trends can vary by industry, naturally, but the daily news cycle provides consumers with a never-ending stream of potential safety risks that shine a spotlight on both the quality of the product and the QMS processes of companies themselves.
As we noted in a previous ETQ Blog post, simply Googling “product recalls” brings up well over 100,000,000 results. When you consider that the vast majority of these recalls are likely to be in the consumer marketplace, then it becomes clear that companies need to not only be aware of how poor quality can impact brand reputation and customer trust but also how crucial effective quality management is in terms of limiting the potential for recalls.
Regulatory compliance may not be the sexiest part of the product lifecycle, but consumers are entitled to believe that companies have done everything to ensure that these products have gone through the requisite inspection or auditory processes. Anything less, and companies are walking a thin line between success and failure.
“While recall numbers haven’t been rising drastically, we know companies are increasingly concerned about new regulatory enforcement,” Harvey said. “Rightfully so, what it really comes down to is each company’s ability to live its commitment to safety in every consumer interaction. After all, consumers care little about regulatory definitions and nuance. What they care about is the safety of their families and friends. We must always remember that.”
ETQ believes that quality does not discriminate between industry sectors and company size. With over 25 years of experience behind us, the company mantra that quality creates limitless possibilities has allowed companies to optimize the critical processes that drive excellence and create a culture of quality. Our Reliance 2019 SaaS software features built-in best practices and best-in-class flexibility, proven business optimization tools that are trusted by more 550 companies worldwide.
To find out how ETQ can move your company along its quality journey, contact us today for a demo.