Operating in one of the most highly regulated environments makes it challenging to avoid the fallout from a costly recall. Falvey’s new Product, Defect, Recall, and Contamination (PDRC) coverage can help you do just that. Our PDRC coverage is specifically intended to protect pharmaceutical and medical device manufacturers from the financial and reputational damages of a recall.
The pharmaceutical community knows all too well how often—and easily—recalls can occur. This industry has exacting standards and faces strict regulatory oversight. Even small discrepancies on labels can lead to major recalls. And major recalls can have financially devastating impacts on a manufacturer, from the business interruption costs to the brand rehabilitation expenses needed to remedy the event.
Examples of Major Pharmaceutical Recalls
- Arthritis Medication: The Merck Vioxx recall is perhaps one of the most catastrophic recalls in U.S. history. In 2004, the drug manufacturer Merck pulled its arthritis medication, Vioxx, from the market after studies found it was linked to heart attacks. In fact, an FDA investigation suggested that the prescription medication may have been associated with 140,000 heart attacks, which resulted in roughly 60,000 deaths. When factoring in the expense of the lawsuit and the settled claims, this recall cost Merck a staggering $4.85 billion.
- Drugstore Products: As the world’s largest healthcare company, Johnson & Johnson has faced its fair share of recalls. One significant recall occurred in 1982 when the brand pulled its Tylenol products due to contamination. Post-production, someone had poisoned the Tylenol capsules with cyanide, causing seven people to die after ingesting the contaminated medication. This recall cost the company $100 million. However, it wasn’t the first, nor the last, recall for the manufacturer. According to 2010 Q3 earnings reports, the brand’s many recalls have resulted in $665 million in lost revenue.
Falvey’s PDRC Protection For Pharmaceuticals & Medical Devices
Falvey’s PDRC policy is designed to protect manufacturers of generic drugs, over-the-counter medicines, patented/brand-name drugs, and Class I, II, and III medical devices. Whether a manufacturer is dealing with accidental contamination, malicious tampering, extortion, or a government recall, PDRC can help insulate your business from the worst-case scenario. Our comprehensive PDRC coverage includes:
- Recall costs
- Brand rehabilitation expenses
- Extortion payments
- Business interruption
- Third-party recall contractual liabilities
- Extra expenses
To learn more details about our PDRC coverage for the pharmaceutical industry and how this policy could work for you, contact us. We can help.