Why Hasn't McNeil's President Resigned Over the Tylenol Recall? (Among Other Unsolved Mysteries at J&J)
More of Johnson & Johnson (JNJ)'s over-the-counter brands have been recalled, again relating to the "smelly boxes" issue, in an indication that the situation at the company has yet to stabilize. The Tylenol brand has been in disarray since 2008. Currently, there are more questions than answers surrounding J&J's McNeil Consumer Healthcare unit, the company that makes Tylenol, Benadryl and Motrin, the brands recalled from the U.S. and various island nations two days ago.
Among the mysteries:
Why has McNeil president Peter Luther not resigned? This disaster happened on his watch. It was Luther who allegedly told federal investigators that the Fort Washington, Pa., plant did not make children's medicines for other companies, four days before the FDA announced a recall of PediaCare products made by McNeil at the same plant. It was Luther who wrote a 2008 email authorizing the phantom recall of Motrin via mystery shoppers. "Let's make this happen ASAP," it said. It was Luther who should have told J&J worldwide chairman Colleen Goggins all about the phantom recall prior to her June 11 Congressional testimony. At the panel, Goggins appeared surprised at the news and said she didn't know anything about it. Did Luther tell her before she got on the plane to D.C.? Or was Goggins being coy? And it is Luther who has been M.I.A. from the public sphere ever since the crisis struck. Surely, his days at J&J are numbered.- Will J&J be able to meet the July 15 deadline for its action plan to be submitted to the FDA? (And what will that plan say?)
- Why has CEO William Weldon's June 30 Congressional testimony not been rescheduled? He was invited to appear June 30, then suddenly disinvited, and House Oversight Committee chairman Ed Towns hasn't re-invited him again, yet. Weldon isn't off the hook, a committee rep told me. "The committee still plans to hold the hearing and intends invite Mr. Weldon but there's no date yet," she said. (Weldon's back ought to be feeling better by then.)
Why did J&J pull its advertising for Tylenol before announcing the recall? The big recall that resulted in McNeil's factory being shut down occurred April 30, but J&J had almost all its Tylenol ads off the air by the end of March. J&J has declined to explain why it moved quicker to save its advertising money than it did to get its products off store shelves.- Can Tylenol ever recover? Ad Age reports: "For the four weeks ended June 13, J&J's internal-analgesics sales are down 65% from a year ago, with a corresponding decline in market share, according to SymphonyIRI data from Deutsche Bank."
- Can Motrin, Benadryl and Zyrtec ever recover? There will be no more Tylenol production until 2011 from J&J's Fort Washington, Pa., plant, but you can imagine once McNeil gets its act together that J&J will give the Tylenol relaunch a huge push. Some consumers are fiercely brand loyal and will forgive the company, and start buying again. Five years from now, Tylenol might be back to normal. But there just isn't the same brand love for Motrin, Benadryl and Zyrtec. Their sales are down by more than half also, Ad Age reports. Will they get big relaunches? Or will consumers just write them off and move on?
Related:
- J&J's Other Headache: Foreign Bribery Probe Targets Shanghai Unit
- It's a Trap! Congress Wants to See J&J CEO Squirm Over Tylenol Recalls
- J&J Denies Knowledge of "Mystery Shoppers," But Emails Say Otherwise
- A Phantom Returns to Haunt J&J: Secret Motrin Pullback Is a Lesson in What Not to Do
- Tylenol Recalls: CEO Weldon Is Either Clueless or Lying, and Neither Will Play Before Congress