The Tylenol Crisis

Not-So-Sweet Story of the FDA and Saccharin

Instructive and milestone in how FDA handles crises

How NOT to handle a crisis:

· February 1977: Press office learned proposed ban to be announced

o Lack of Planning: agency leadership feared discussion of plans would leak

§ Result: Allegations public handling was deliberate effort by FDA to sabotage Delaney Clause

· Press Release:

o Rats in the study consumed amount of saccharin in 800 soda bottles/day

o Signaled incorrectly: FDA did not want to ban Saccharin but had to because of Delaney Anti-Cancer Clause

o Drafted morning issued

§ 1 paragraph and 1 editorial change

§ little thought on how it should have been worded

· Press Conference:

o Held March 9^th, 5:30PM

o Same time Hanafi Muslims holding hostages in 3 buildings in downtown Washington

§ No cameras allowing FDA to explain situation directly to public

· Reporters ignorant: stories reflected this

§ Would have been better to hold it next day

· Press Release:

o Failed to explain properly high dose animal studies

§ This proved to be Achilles heel

· 800 bottle a day statement used to ridicule study

· *Must explain science to media and public!

· Congressmen:

o None issued statements supported intended FDA action

§ FDA Failed to notify congress

· If congress isn’t notified in advance of what you’re plans are, they won’t support them

· Industry:

o Agency failed to alert them

o Had not seen Canadian study ban was based on (no direct knowledge)

§ Could legitimately attack action as premature

· Special Interest Groups:

o Ex: Diabetes Associations

o Also weren’t briefed

· Most Significant:

o Agency released study and announced action in same day

§ Result:

· Moving saccharin debate dramatically into a crisis situation

· Agency will not more that quickly on any new study

Article 31:

The Tylenol Crisis

Key Facts:

· Began Sept. 29^th, 1982

o First 7 Deaths from cyanide-laced Tylenol capsules

o In Total, Unidentified Psychopathic Killer laced 44 Extra-Strength Tylenol capsules

§ Alleged extortion attempts against Johnson & Johnson (health care products giant whose subsidiary, McNeil Consumer Products Co, manufactures Tylenol

§ Reports of “hard-core, true tamperings” posed problems for government and corporate managements

Identify PR Problems:

· Before Major problems (all the killings)

o Factfinder: Lawrence Foster (J&J’s VP of PR)

§ Mcneil’s use of cyanide in manufacturing process: NO

· Journalistic sense: Incomplete truthà media relations problem

o After deaths Chicago authorities checked reports of psychosomatic illnesses and Tylenol related rumors

§ Unconfirmed news report: (rumor not known by foster until Sat. Oct. 2^nd/ 2 days after first Tylenol death)

· Cyanide was used as analytical agent to test both Tylenol raw materials and finished product

§ Media verified despite j& J’s attempts to explain presence of “small quantity” in lab for testing

· àJ&J’s credibility tarnished

o no corporate PR staffer knew

§ later discovered tampering occurred at retail level

· Tylenol Recall

o Quickly (2^nd day of crisis, Oct. 1^st: 6^th death) recalled millions of bottles in US & Abroad

o Spent $½ million warning physicians, hospitals, and distributers

o Product advertising stopped

o J&J’s Top management group met 2x/day during crisis

§ Would public link Mcneil to J&J (not promotionally identified together)?

· Possible consequence: negative repercussions by millions of J&J product consumers, 38,200 stockholders, loss of moral of 77,000 employees

o “communications media monster” 80,000 US Newspaper stories in 3 days, hundreds of hours of national and local television radio coverage

§ before: 250 media contact during 78, 337 in 79, 573 in 80, 687 in 81, 401 in first half of 82: unprecedented in 97 years of J&J

§ Nov. 11^th national news conference

· J&J chairman & chief exec. Officer: Burke

o “90% of American public knew that only Tylenol capsules, not tablets, involved. (Young & Rubicam surveys showed) 93% public believed ‘problem could occur for any capsule’ and 90% felt maker not to blame’”

Surveys:

· consumer attitudes on using Tylenol with “new triple safety-sealed tamper-resistant” packaging

· Shapiro survey data suggested need to step up promotional efforts for purely defensive purposes (Feb. 18^th)

o Foreshadowed 3 months earlier by Foster who disclosed $4 million spent on national coupon ads (sales promotion)

§ “thank you America for your continuing confidence and support_”: redeemable for $2.50 towards Tylenol product purchase (telephone toll-free number for coupon)

Final results:

· Public warning and recall cost J&J $100 Million total (Burke)

o Could afford that because Despite Tylenol crisis:

§ After tax charge around $50 million, 27 cents/share in third quarter

§ Net earnings $2.52share year on sales of $5.76 billion compared to $2.51/share on sales of $5.40 billion in 1981 (increase of 6.7%)

Article 633

Дата добавления: 2015-10-31