Consumer 10.0: Before recall, McNeil's edge was its reputation

It's been a few years, but I still recall those anxious trips to the drugstore when our little kids were ailing - when I'd puzzle over remedies for fevers or colds, or that mystery malady my wife and I called "existential angst" until we discovered teething.

I knew enough about generics to trust them completely - for myself. But when it came to my children, I almost always went for the name brands. With so many other worries, I thought, why take an extra chance?

So I paid for Tylenol Infant Drops, Children's Tylenol, and other name brands, many of them made by McNeil Consumer Healthcare, the Johnson & Johnson subsidiary. Even if they cost twice as much, I figured better safe than sorry.

The truth is that I always wondered, just a little, whether I was being duped. Now, I pretty much know.

Last week's news about problems at McNeil's Fort Washington plant is a reminder of a marketplace truism we often forget: Advertisements and reality don't necessarily match.

McNeil is hardly the first company to risk squandering a top-notch reputation. Remember a little company named Toyota? But McNeil runs an additional risk because of its market, where it competes with generics that spend little or nothing on ads and offer reliable, equivalent alternatives at consistently lower prices.

McNeil's edge rests entirely on its reputation, which makes last week's news all the more stunning - especially since it involved products aimed at babies and children.

The company's latest trouble erupted nine days ago, when it announced a massive recall of more than 40 liquid versions of four leading brands of over-the-counter medicines - Tylenol, Motrin, Benadryl, and Zyrtec - that it said "may not meet required quality standards."

The bad news culminated, for now, with the release of a disturbing inspection report by the Food and Drug Administration and McNeil's announcement that it had suspended all production at the plant.

The FDA's findings are preliminary, but its concerns shone through in the inspection report and in careful explanations by officials discussing the findings at a news conference.

For example, FDA inspectors mention batches of "super potent" infant Tylenol drops. Though they did not indicate how off the dosage was, they said the plant lacked proper controls "to assure that the drug products have the identity, strength, quality, and purity they purport or are represented to possess."

Another of their 20 critical observations said the plant lacked a "written testing program designed to assess the stability characteristics of drug products." If that makes you wonder how McNeil decided on expiration dates for its products, you're not the only one.

FDA officials also reminded reporters of the larger context of McNeil's troubles, including a series of recalls starting last fall of various adult products - including Tylenol Arthritis Relief, Motrin, Benadryl, even Rolaids.

Those products, all made at a McNeil plant in Puerto Rico, were plagued by reports of a musty, mildewlike odor linked to cases of nausea, vomiting, and diarrhea - an odor eventually attributed to a pesticide and flame retardant used on wooden shipping pallets.

In January, the FDA took an unusual step: It issued a warning letter to McNeil that said the company's inquiry into the contamination, first reported in 2008, had been "unjustifiably delayed and terminated prematurely." The letter also voiced a variety of other concerns about McNeil and Johnson & Johnson's response, including whether the recall itself had been "adequate in scope."

This time around, that's one point on which McNeil can hardly be faulted. The company has recalled all unexpired bottles of every liquid version of the medicines involved.

McNeil has not publicly disputed the FDA's findings, and says: "We will continue to work in close consultation with the FDA to take corrective action and ensure that our quality operations meet the high standards that consumers expect from us."

At Tuesday's news conference, FDA officials made it clear that while last month's inspection in Fort Washington was officially a "regular inspection," its timing was anything but.

"One of the factors that can be used in determining where we go when is the firm's inspection history. And that did in fact drive us to inspect this facility more quickly," said Deborah M. Autor, director of the Office of Compliance in the FDA's Center for Drug Evaluation and Research.

Several steps remain before the FDA decides what to do about the plant. McNeil could receive another warning letter, face product seizures, or even face civil or criminal penalties. Its other plants and products will undoubtedly face extra scrutiny.

But the preliminary verdict is in from some outside the agency. And it's not pretty.

"For a company like McNeil, and for Johnson & Johnson, I have expectations of the highest standards," said Daniel A. Hussar, professor of pharmacy at Philadelphia College of Pharmacy, University of the Sciences. "So I would say that the FDA report, in my view, is shocking."

Hussar noted an inspector's reference to a contract employee at the plant and said he worried about the effects of downsizing at McNeil and Johnson & Johnson. Cutbacks can leave workers "hard-pressed to maintain the quality and standards they're used to," he said.

In a sharply worded editorial at OTCProductNews.com, a trade journal, editor Donald Riker, who has a doctorate in neurobiology, said the FDA inspection revealed "a breathtaking track record of failure."

Riker said the likelihood that children received more Tylenol than intended raises health concerns, despite FDA assurances that the chance of ill effects from the company's problems seems remote. Overdoses of Tylenol (or, generically, acetaminophen) can cause liver failure. "The fact that these are products targeting infants makes it even more reprehensible," he said.

Of course, the verdict that will matter most to McNeil is the one coming from consumers when its products return to store shelves.

The company will undoubtedly hit the airwaves with an intense round of mea culpas and feel-good appeals. Years of goodwill for its brands may see it through.

The trouble will come if consumers finally conclude that, at McNeil, marketing and the bottom line are what always mattered most.