The Johnson & Johnson's Tylenol Controversies
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TYLENOL DEATHS
In September 1982, a 12-year-old girl, Mary Kellerman of Chicago, US died after taking extra strength Tylenol for headache. Three more people, Adam Janus, his brother and sister-in-law died on the same day after taking extra strength Tylenol. Three more deaths were reported on the next day due to Tylenol. The news of the incident spread quickly causing a nationwide panic. Responding to the crisis, Johnson and Johnson (J&J) recalled 31 million bottles of extra strength Tylenol worth over $100 million from all retail stores in the US. In addition, the company offered to exchange tablets for capsules at no extra cost for all customers. |
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According to an analyst, J&J suffered a loss of $1.24
billion due to the depreciation of the company’s brand value. Tylenol’s
share fell from 37% of the US analgesics market in early 1982 to just 7%
by late 1982. According to media reports, the sudden deaths occurred
because the Tylenol capsules had been laced with cyanide. The capsules
had been opened and filled with 65 mg of cyanide . Inspite of the
deaths, J&J was praised for its quick action and sincere efforts in
recalling Tylenol and giving consumer safety as top priority.
In 1986, J&J faced a similar crisis when yet another incident of product
tampering was reported. A woman in New York died after taking a cyanide
laced extra strength Tylenol capsule. J&J had to once again recall all
the capsules. The company promised to offer Tylenol only in the tablets
or caplets form.
In 1989, J&J faced another problem when deaths were reported due to
overdoses of Tylenol. Following this, there were hundreds of deaths and
severe liver damages all attributed to Tylenol’s main ingredient –
acetaminophen. Many analysts felt that J&J’s label should have been more
explicit, in warning customers.
According to media reports, at least 100 suits had been filed against
J&J over acetaminophen poisonings between 1990 and 1997. However,
despite the bad publicity and the costly legal settlements, J&J did not
seem keen on warning its customers. Analysts wondered about the company
which had been a role model in prioritizing consumer safety during the
1982 crisis.
BACKGROUND NOTE
Inspired by the discoveries of Sir Joseph Lister (Lister) , Robert Wood Johnson
(Robert) and his two brothers formed a partnership firm to nurture the idea of a
practical application of Lister’s discoveries. Robert planned to enter the
surgical dressings industry with a new type of readymade, sterile, wrapped and
sealed surgical dressing in individual packages and suitable for instant use
without the risk of contamination. In 1887, the trio converted the partnership
into a company and the company was incorporated as Johnson & Johnson.
Over the years, J&J established itself as a leading player in the healthcare
industry. The company introduced revolutionary surgical dressings, acquired
established companies , and expanded internationally.
In 1956, Tylenol became a part of J&J, when the company acquired McNeil
Laboratories . Tylenol was sold as an over-the-counter (OTC) drug. During the
1960s, J&J aggressively promoted Tylenol among doctors and pharmacists as an
alternative pain reliever. Soon, the product became very popular among
consumers, as it was less irritating to the stomach as compared to other OTC
analgesics like Aspirin or Ibuprofen (See Exhibit I).
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