Mike Rozembajgier09.10.08
Recall Management: Planning for the Unexpected
Questions force companies to examine how recalls impact business. Following is a step-by-step guide and recommendations to help you prepare for a recall.
Mike Rozembajgier, Stericycle
A medical device organization undergoes a Class II recall, requiring the removal of approximately 400,000 affected products from the marketplace—200,000 of those out of consumers’ homes.
Immediate concerns rightfully center around maintaining FDA compliance and putting the company’s recall procedure in place. Dealers, patients, hospitals and physicians need to be made aware of the situation in a timely fashion—and hundreds of thousands of inbound phone calls need to be handled. Can the recalling company manage the complex logistics of this recall within the timeframe required? Is the recalling company capable of the follow-up required for an effective recall? Will the recalling company be able to continue with business as usual while its valued staff works to manage the critical event?
The recalling company also must confront the effects of a recall on future business. The company could face legal liability due to product failure resulting in an adverse reaction. Customer confidence may vanish. The potential impact on market share could reach far past the point of recovery.
Multiple factors determine your success in managing a recall. Being prepared is both critical and essential. Following are recommended steps to take and important questions to ask to help your business prepare for a recall event.
Identify Recall Goals
A company’s goals in managing a recall should never change; regardless of the recalled product or class, a recalling company should aim to:
1. Protect the public. This obviously is the top driver behind a recall or withdrawal. You must work to ensure public safety by removing the affected product out of consumers’ hands as quickly as possible.
2. Protect your brand. The way a company handles a recalled product undoubtedly affects the product at hand, as well as the firm’s overall corporate reputation. By acting promptly and efficiently, you ensure public safety while protecting your brand.
3. Close the recall as soon as possible. This protects your bottom line and enables you to focus on normal business operations. One of the best ways to keep your valued employees focused on their job duties during a recall is to outsource your event to a qualified service provider.
Know the Expectations
It is important to understand what the FDA will want to know about your recall. You should be able to answer the following questions at length:
• What is the health hazard?
• Where is the affected product?
• How effectively did you notify the affected population? How can you prove it?
• How much affected product is in the market?
• How much of the affected product was retrieved from the market?
Define Your Recall Strategy
Despite the fact that regulations and FDA guidance strongly recommend comprehensive recall planning, many companies do not focus on these preparedness activities.
It’s clear that all companies—particularly those whose products have the potential of being recalled—should be prepared for the worst. Developing and documenting a simple plan and taking measures to ensure its effectiveness are necessary in diverting crisis long before an event arises.
A recall management procedure should be in place and administered by your assigned recall team, which will convene as soon as any recall conversation is initiated. The team’s responsibilities should include:
• Completing the FDA Health Hazard Evaluation
• Identifying the root cause of the recall
• Bracketing the scope/quantity of affected product
• Identifying when the product was manufactured and distributed
• Determining the consumption/use rate of product
• Identifying who is in possession of the affected product
The FDA oversees a medical device recall to make sure the actions the company takes are adequate to protect the public. During a medical device recall, the FDA will work with the recalling firm to obtain information about the product, the problem, the recall strategy and the steps needed to prevent the problem from happening again. The FDA will conduct audits to make sure the recall efforts are both appropriate and effective. This further stresses the need for the recalling company to have an effective tested plan in place.
Determine the Audience and Proper Communication
Determining who to notify of your recalled product and how to notify them is a critical initial step. This activity can be quite an undertaking and has many downstream effects. Is your audience only at the retail level, or has the affected product been shipped directly to consumers? Do you have these lists complete with shipping information? Are the lists accurate? Are you sure? Is the information centralized in one system? How quickly can you access the information with custom queries?
Communication is seen as being vital in the recall services world. The involvement of multiple vendors illustrates the challenges and importance of sending the proper information out to those who need it. Furthermore, broad-based tools such as voice alerts, faxes and the Web are necessary in communicating the right information to the right audience. You must determine how you want to notify—via mass media, letter/package, telecommunications, etc.—and the implications therein.
Do you have the ability to generate large-volume, multiple-page document packages? If so, can you do so in a time-efficient manner—which, in a recall event, means “now”? Do you know how to structure the notification in a manner that aims toward compliance and recall effectiveness?
You must have quality control checks in place to make sure all document packages are sent, as the FDA will require you to research any non-deliverable addresses and resend their recall notifications. And to avoid potential legal action, you must be able to track successful delivery of document packages in court.
You also must consider your response capabilities during a recall. Can you field thousands of inbound phone calls per day for the next several months? Do you have a process in place to accurately document thousands of business reply cards (responses)? Where will you house the data?
Another major communications challenge facing industries impacted by recalls is the protection of a company’s reputation during an event. Recalling companies often are challenged in determining what information is needed for a recall, as well as gathering that information and distributing it to the appropriate people. Companies undergoing a recall often question what the main emphasis of their message should be, who should receive the message and what method they should use to disseminate the message.
Establish Processing Capabilities
When determining whether you can accommodate affected product, you must consider the scope of any recall event. Do you have a facility where you can receive affected product, and further, do you have a place to store returned affected product? You also must be able to safely quarantine the affected product from any non-affected product.
It is important to note that you must have processors quantify affected product to ensure accurate returns. Do you have these processors, and where will you house the data?
You must determine whether to send replacement product or information. Are you prepared to refill shelves with replacement product? How long will it take before your normal supply chain replenishes your product? Can you replenish in less-than-case quantities? How many sales might be lost along the way?
Reimbursement can present a recalling company with a major challenge. Do you have the ability to cut checks to your indirect accounts that return product? And are you prepared to issue credits to direct accounts?
Effectiveness checks also will need to be conducted during the recall. You will need to contact non-responders via telephone. In your tracking efforts, you must consider documentation of these conversations; are you prepared to show proof of any attempts, if required by the FDA?
In addition, you may want to conduct on-site effectiveness checks to ensure appropriate removal of product from various locations. Who will do this from your company and how fast can you complete the task? What opportunity cost does this entail for the company? Where will you house the data? Realize that the FDA may conduct random on-site audits as well to determine the effectiveness of the recall.
Product Retrieval as Brand Protection
The possibility of experiencing a recall is terrifying. But if and when this unfortunate event occurs, it is important to remember that consumers are not the only affected party.
In a recall event, as the manufacturer, you have a lot at stake—protecting your brand while protecting your valued customers. You must quickly and accurately ensure that the affected product no longer is in the hands of the public, but how?
You may want to employ a product retrieval service to ensure that only the affected product is removed from the marketplace. This, in turn, will help:
• Minimize market effect
• Reduce the amount of time spent by your sales force to remove the product
• Reduce potential litigation
• Ultimately limit financial loss
By implementing a retrieval operation, you ensure that only the affected product is removed from the appropriate avenues—distribution centers, hospitals, retail stores, physicians’ offices or even consumers’ homes—all while keeping your sales force focused on customer service and business growth.
Close Out Your Recall
Once you have effectively completed the necessary steps to notify the public, field responses and process the affected product, you may ask the FDA for permission to close out your event. Be prepared: A typical recall may last nine to 12 months, and regular status reporting to the agency will be required.
At this point, you must assess your product destruction capabilities. Do you have the means to safely destroy hundreds of pallets of affected product? Can you handle hazardous material? Controlled substances?
If you plan to partner with a third party for destruction, can you guarantee your partner issues certificates of destruction? In most cases, you will want to witness the destruction of affected product.
Outsourcing Is Advantageous to Business Practices
How much of an impact can recall outsourcing have on productivity? It has been estimated that companies could see a 50% increase in performance levels just by outsourcing their recall program to a qualified service provider.
Tackling an event in-house significantly impacts a company’s entire staff—from quality, safety and regulatory departments to legal, communications, customer service and even sales and marketing teams. As these employees become involved in handling recall-related duties during an event, many are unfamiliar with the processes required and lack the expertise needed to handle the recall in an efficient and compliant manner. The result is that both human and financial resources are exhausted, and often, the recall is not properly managed.
Former FDA Senior Recall Coordinator Willie Bryant has stressed the value of working with service providers that specialize in recall management. Such providers boast in-depth knowledge of numerous federal agencies including the FDA, Drug Enforcement Agency, Securities and Exchange Commission, Consumer Product Safety Commission, Environmental Protection Agency, and Occupational Safety and Health Administration, among others.
“Outsourcing recalls not only provides significant cost savings, but may improve compliance, reduce potential liability costs and allow company employees to focus on normal business activities,” said Bryant.
Mike Rozembajgier is director of Recalls for Stericycle. He is responsible for all aspects of Stericycle’s Recall services offering, including development of strategic recall business initiatives, product enhancements, pricing and contracts, as well as marketing tactics. Mike has more than 10 years’ experience in the healthcare industry. Prior to joining Stericycle, he held management roles at Guidant Corp. (now Boston Scientific) and at Deloitte in its Strategic Healthcare Consulting practice. He can be reached at mrozembajgier@stericycle.com or (317) 294-1883.
Stericycle was founded in 1989 as a global leader in infection control management and regulatory compliance and has since rapidly expanded into the reverse logistics and communications industries to provide a complete portfolio of services—ExpertRECALL, ExpertRETURN, ExpertCOMMUNICATION and ExpertRETRIEVAL. With highly advanced capabilities in product recall, return, global communication and retrieval technologies, Stericycle can efficiently execute complex, large-scale tasks at one strategic location. The Stericycle team is comprised of industry-leading experts, including a former FDA senior recall coordinator. With facilities in Indianapolis, IN; Conyers, GA; and Boynton Beach, FL, Stericycle serves more than 375,000 clients worldwide. For more information about Stericycle, visit www.Stericycle.com or call (888) 843-0252.
SIDEBAR:Evaluate Your Performance After Handling a Recall
It is important to administer a post-event analysis after your event is closed out. Often, in the post-event reflection, companies find it best to hand over their future recalls to a service provider.
The following post-event questionnaire will help determine your capabilities in recall management for future events:
- Did we have a strategic recall plan in place prior to this event? Did we follow procedure?
- Were we compliant with FDA regulations?
- Were our notification measures successful? Were we able to provide documentation (proof of attempts to contact affected parties, etc.) to the FDA?
- Did we remove affected product from the marketplace in a timely manner?
- Did we remove only affected product?
- Were we able to receive and store affected product?
- Did we successfully handle reimbursement/fulfillment?
- Did we properly follow up with all affected parties?
- During closeout of the recall, did we oversee destruction of the affected product?
- What kind of hit did we take in terms of productivity loss while managing the recall?