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Can Johnson & Johnson get its act together?

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Thu, 27/01/2011 - 11:10

Johnson & Johnson had to recall a variety of products in the United States last year because of quality-control problems across product lines, in multiple factories and in several units. One of their products may have contained bits of metal. Another product came in pill bottles with a mouldy smell. All of this has put the company and its manufacturing under the intense scrutiny of lawmakers and officials at the US Food and Drug Administration agency.

Johnson & Johnson’s troubles began in earnest in January 2010, when McNeil, a pharmaceutical company owned by Johnson & Johnson, recalled millions of pill bottles after some consumers complained that they smelt mouldy. By December 2010, when it recalled 13 million packages of Rolaids soft chews that may have been contaminated with metal or wood particles, Johnson & Johnson had closed one factory in Fort Washington, Pennsylvania, for an overhaul and had yet to solve the quality problems at another factory in Puerto Rico.

With such a diversity of products and operating companies, Johnson & Johnson’s overall business has not suffered significantly. But the string of recent recalls at McNeil threatens to weaken the kind of trust that made many people willing to pay more for Johnson & Johnson brands. BrandIndex, has noticed a steady, albeit not steep, erosion over the last 18 months in how consumers perceive not just drug brands like Tylenol but also Johnson & Johnson the brand.

The reasons for McNeil’s woes remain unclear. Some critics, including former employees, say Johnson & Johnson has lost sight of its credo, while others say that the company decentralized its oversight of manufacturing and quality control.

Others say it was simply a matter of cost-cutting. A lawsuit against the company in December 2010, for example, cited two unnamed former employees who contended that the company failed to address the manufacturing problems at McNeil because it was trying to save money.

While some critics think Johnson & Johnson is on the right track, BrandIndex shows perception has eroded steadily over the last two years for Tylenol.

Tylenol and Johnson & Johnson 'Buzz' scores
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