Life Sciences:

Product Recall Trends and Risk Mitigation Strategies

Medical device recalls have increased significantly, with 2024 witnessing a notable rise in recall events and impacted units. Design-related and manufacturing defects are the leading causes of device recalls, while Class I recalls, posing the most serious safety risks, have also surged. The FDA is enhancing the recall process and communication, including a pilot program for early alerts about potentially high-risk devices. This article examines FDA product recall trends for medical devices and pharmaceutical companies, highlighting key statistics and industry implications. It also explores the effects of supply chain issues on recalls and provides best practices and risk management tragedies in the event of a recall.

Product Recall Trends

While 2021 saw a noticeable decrease in overall recall events, 2024 has reached almost similar numbers. If the current trajectory continues, 2025 will likely see a comparable or higher number of recalls, considering data through April and eight months remaining.

^{Source: FDA Recall Events Database1}

^{Source: FDA Recall Events Database1}

^{Source: FDA Recall Events Database1}

Medical Devices

Medical device recall events have been trending upwards, significantly increasing in 2024 to a four-year high. Notably, Class I recall events, which indicate a reasonable probability of causing serious adverse events or death, are at a 15-year high. According to FDA data, medical device recalls fluctuated over the past decade, with design-related issues, manufacturing defects and device failure being the leading causes. The rise in recalls can be partly attributed to the rapid development and deployment of new medical technologies, which sometimes encounter unforeseen issues. Software problems play a significant role in medical device recalls.

Recall Events by Fiscal Year and Recall Class:

^{Source: FDA Recall Events Database1}

Pharmaceutical Recalls

Class II recalls, indicating moderate risk issues, dominate the pharmaceutical sector. While the number of Class I recalls remains relatively stable, they continue to highlight severe drug safety concerns. Increased regulatory scrutiny and more robust reporting mechanisms have contributed to identifying and recalling potentially harmful pharmaceutical products.

Recall Events by Fiscal Year and Recall Class:

^{Source: FDA Recall Events Database1}

Industry Implications

The trends in FDA recalls emphasize the need for stringent regulatory compliance for medical devices and pharmaceutical companies. Organizations must invest in robust quality control systems and proactive monitoring to detect and address potential safety issues early.

While innovation drives new treatments and technologies, it also poses safety and efficacy challenges. Companies must balance innovation with comprehensive risk management strategies to ensure patient safety.

Frequent recalls can affect consumer confidence in medical products. Transparent communication and swift action in addressing recalls are essential for maintaining public trust.

Impact of Supply Chain on Product Recalls

The supply chain is crucial in the manufacturing and distribution of medical devices and pharmaceutical products. Disruptions and inefficiencies within the supply chain can significantly impact product quality and safety, leading to an increase in product recalls.

Medical Devices

The following table illustrates the correlation between supply chain disruptions and medical device recalls over recent years:

^{Source: FDA Recall Events Database1}

Pharmaceuticals

The impact of supply chain issues on pharmaceutical recalls is significantly greater than in the medical device sector:

^{Source: FDA Recall Events Database1}

The percentage of recalls attributed to supply chain issues has steadily increased, highlighting the growing impact of supply chain disruptions. Inconsistent quality control across the supply chain is a major contributor to recalls, emphasizing the need for robust quality assurance mechanisms. Navigating different regulatory standards across countries can lead to compliance issues, increasing the risk of recalls.

Supply Chain Challenges

Complexity and Globalization

The modern supply chain is highly complex and often spans multiple countries and continents. This globalization introduces several challenges:

• Quality Control: Ensuring consistent quality across different suppliers and manufacturing sites can be difficult, leading to variability in product quality.
• Regulatory Compliance: Different countries have varying regulatory standards, making it challenging to maintain uniform compliance.
• Communication: Effective communication between all stakeholders in the supply chain is crucial but can be hampered by geographical and cultural differences.

Just-In-Time Manufacturing

Many companies adopt just-in-time (JIT) manufacturing to reduce inventory costs. While JIT can improve efficiency, it also increases vulnerability to disruptions:

• Supply Disruptions: Any delay or disruption in the supply chain can halt production, leading to potential quality issues as companies rush to meet deadlines.
• Limited Buffer: With minimal inventory, there is little room for error, increasing the risk of defects and recalls.

Raw Material Shortages

Shortages of raw materials can lead to compromises in product quality:

• Substitute Materials: Companies may use alternative materials that do not meet the same quality standards, increasing the risk of recalls.
• Supplier Reliability: Dependence on a limited number of suppliers can exacerbate the impact of shortages, leading to inconsistent product quality.

Risk Mitigation Strategies

The best time to prepare for a recall is before an event occurs. There are several strategies and measures life sciences companies can implement to reduce the likelihood of a recall and help mitigate the impact of a recall event when it occurs.

Strengthening Supplier Relationships

Building strong relationships with reliable suppliers can mitigate supply chain risks:

• Supplier Audits: Regular audits and assessments of suppliers can ensure consistent quality and compliance.
• Long-Term Contracts: Establishing longterm contracts with key suppliers can provide stability and reduce the risk of disruptions.

Diversifying the Supply Chain

Diversification can reduce dependence on a single supplier or region:

• Multiple Suppliers: Sourcing materials from various suppliers can provide a buffer against shortages and disruptions.
• Geographical Diversification: Distributing manufacturing and sourcing across different regions can mitigate the impact of localized disruptions.

Investing in Technology

Advanced technologies can enhance supply chain visibility and efficiency:

• Supply Chain Management Software: Implementing sophisticated software can provide real-time visibility into the supply chain, enabling proactive issue resolution.
• Automation: Automation can streamline processes and reduce the risk of human error, improving overall quality and consistency. Automation also significantly correlates to reduced workplace injuries, improving companies’ workers’ compensation modifications.

Product Recall Insurance

Product recall coverage is typically excluded from all life sciences product liability and errors and omissions liability insurance policies. Still, it may offer a sub-limit to cover first-party expenses related to a recall.

• Product Recall or Withdrawal Expense Coverage: Most product liability policies offer a sub-limit for Product Recall or Withdrawal Expense coverage. This first-party coverage limit provides a limit for expenses like storage and disposal costs, attorney fees for consulting services, and transportation costs relating to a recall. However, this coverage does not extend to third-party damages, such as the cost of replacing goods. A full recall policy should be considered.
• Product Recall Coverage: Third-party recall coverage, also known as ‘full’ or ‘true’ recall coverage, provides coverage for costs associated with loss of use and replacement of recalled products in addition to reimbursing third parties for expenses they incur as a result of a recall.

Contractual Risk Transfer Controls

When utilizing contract manufacturing organizations (CMOs) to produce products, having strong contractual controls is a first defense. All CMOs should be required to carry minimum limits of insurance, list the contracted party as an additional insured on the CMO’s policy, and contractually require the CMO to indemnify the contracted party for manufacturing errors and omissions and related recall costs and expenses.

Product Recall Response Plan

Product recalls are inevitable in the life sciences industry to ensure patient safety and public health. The FDA has consistently emphasized that firms must be “recall ready.”

As regulatory pressures intensify, it is crucial for manufacturers to assess how prepared they are to withstand a product incident or crisis:

Formalized-written product-recall plan

A formal written recall plan should address and describe the following procedures:

• Determining if a recall is needed and the processes for reporting a recall to regulatory agencies.
• Identify the person(s) or key roles executing the recall. Specific duties should be assigned to specific individuals to ensure the effective execution of the recall plan.
• Identified system for locating and isolating shipments of all affected products.
• Plan for the execution of notifying customers and consignees of the product as well as the public when necessary.
• Procedures for product replenishment and appropriate disposal or refurbishment of recalled products.
• Conduct effectiveness checks to verify the recall has been appropriately executed and review plan of accuracy. The plan should include monitoring of the recall.

Testing the formal written recall plan by conducting mock recalls

A mock recall is a simulated process to test and evaluate the effectiveness of a formal recall plan. Mock recalls can help identify vulnerabilities in traceability or faults in a recall strategy. Mock recalls are a mechanism to improve procedures and increase readiness to ensure swift action in the event of a genuine recall.

Internal communication strategy

• What to say: In addition to a formal written recall plan, manufacturers should develop an internal communication strategy that addresses how to advise employees and sales representatives of the recall and how they should respond to inquiries.
• What not to say: It is essential to guide employees and sales representatives on what to say during a recall and what not to say. Disparaging remarks and acknowledgments of product performance made by employees and sales reps in the recall process to consumers, physicians, and end users may be discoverable if a lawsuit or claim is filed concerning injuries related to a recalled product.

Conclusion

The supply chain is a critical factor influencing medical device and pharmaceutical product recalls. Addressing supply chain challenges through strategic supplier relationships, diversification, and technological investment can significantly reduce recall risks and enhance product quality. Proactively managing supply chain risks helps protect public health and maintain regulatory compliance.

Implementing risk mitigation strategies to reduce recall likelihood is essential. Additionally, having a robust and tested recall program minimizes potential impacts in the event of a recall.