In 1982,
Johnson & Johnson 's (NYSE: JNJ) Tylenol
was recalled because of
cyanide poisoning. Now the company is recalling some lots
of the Children's and Infants formula of the drug because of
the potential for bacterial contamination. The new recall
should have about the same long-term effect on sales as the
old one: Not much at all.
No one has been hurt this time. In fact, the company
hasn't found any bacteria in the finished product. The
bacteria were discovered in a raw material that wasn't used
in the production. Still, Johnson & Johnson decided to be
extra-cautious and recall product that used any of the raw
material produced at the same time.
If Johnson & Johnson does this right, it'll come out
looking like an overprotective parent -- in short,
exactlythe type of company from which parents would
want to buy drugs for their children. That's how it won back
customers last time: By recalling more than $100 million
worth of product and developing triple tamper-resistant
packaging, the company was able to show customers that it was
serious about safety.
Even if the recall does hurt sales a little, Tylenol isn't
a giant contributor to the health-care conglomerate's revenue
-- J&J doesn't even break out those sales. After all, it
has to compete with generic acetaminophen, not to mention
other pain relievers such as
Wyeth 's (NYSE: WYE) Advil and
Novartis ' (NYSE: NVS) Excedrin.
Johnson & Johnson's sales of over-the-counter products
increased substantially when J&J bought
Pfizer 's (NYSE: PFE) consumer health
division in 2006. That purchase brought with it
consumer sentimentthat can change faster than the views
of prescription drugs -- remember J&J's Motrin Moms
debacle last year? However, in this case, it looks like the
issues may be minimal.
This article was originally published as
Oh, No! Another Tylenol Recall?on
Fool.com
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