Recent data shows that more than 1 billion units of food, pharmaceuticals, medical devices, vehicles and consumer products were recalled in the U.S. for the second year in a row.
In 2022, the number of units recalled was a record-breaking 1.5 billion, according to Sedgwick’s 2023 State of the Nation Recall Index report. With regulators taking an ever more aggressive stance, it is highly possible that 2023 could end up being another year with more than 1 billion total units recalled. Businesses from all industries should take heed and maintain vigilance with respect to product safety and recall readiness.
U.S. regulators are making up for time lost during the pandemic with a constant stream of anticipated guidance and updates to current regulations. Adapting to these new rules may pose challenges for many companies, who will also face risks from continued economic and geopolitical issues.
In this State of the Nation report, we analyze recall data from 2022, as well as provide a preview of 2023. To assist your company in understanding and preparing for the issues your industry may encounter in 2023, the report also provides insights and forecasts from several of our key partners at top law firms in the U.S.
Electric vehicles become a top priority for automotive regulators
Autonomous vehicles (AVs) and electric vehicles (EVs) continued to hold the attention of regulators and stakeholders across the automotive industry in 2022. In an effort to boost EV adoption, the Biden Administration took several steps to create a nationwide EV charging network. The Environmental Protection Agency (EPA) also proposed changes to the Renewable Fuel Standard (RFS) program that would make EV manufacturers the sole entity able to generate and sell eRINs, a new category of Renewable Identification Numbers (RINs) – which are RFS credits that can be traded, bought and sold. Overall, there was a 12.6% decrease in U.S. automotive recalls for 2022 compared to 2021. The industry finished 2022 with 3.58 million fewer units recalled compared to 2021 and the fewest units recalled annually in the last nine years.
CPSC takes aggressive stance in 202
In 2022, the Consumer Product Safety Commission (CPSC) adopted a more aggressive enforcement strategy, making it abundantly clear that businesses must immediately report any safety concerns in order to avoid legal action and hefty fines. In 2023, that strategy will likely persist. With the federal Safe Sleep for Babies Act of 2021 and the CPSC’s Safety Standard for Baby Sleep Products going into force, U.S. regulators continued to place a high priority on protecting children. Similar to previous quarters, regulators took action against perfluoroalkyl and polyfluoroalkyl substances (PFAS) at both state and federal levels. Consumer products hit a six-year high in 2022 for the number of product recalls in a single year with 286 events. That is up 31.2% compared to 2021.
FDA focuses on healthy foods and information for consumers
In 2022, the Food and Drug Administration (FDA) prioritized regulations that promote the health of consumers. In October, the agency published a proposed rule that will amend the requirements for using the term “healthy” on food packaging. According to the FDA, the modification would bring the definition of the “healthy” claim into line with modern nutrition theory, recent modifications to the Nutrition Facts label, and the current Dietary Guidelines for Americans. The FDA also released the Food Traceability Final Regulation under the Food Safety Modernization Act (FSMA), which seeks to increase the availability of data necessary for tracking foods and food products across the supply chain in an effective and efficient manner. The total number of units involved in FDA food recalls in 2022 was 700.6% higher than in 2021, while for the USDA, annual recalled units plummeted 87.0% in 2022.
New Commissioner brings tougher enforcements in pharmaceutical industry
Dr. Robert Califf was named FDA Commissioner in February 2022, following more than a year with the position vacant. The FDA tightened its regulations for cannabis and nicotine in the second quarter and sent out its first letters of warning for goods containing delta-8 tetrahydrocannabinol (delta-8 THC), a psychoactive component of cannabis. The agency also acted quickly to outlaw the sale of one e-cigarette manufacturer’s goods and to propose regulations regulating flavoring in cigars and cigarettes. The Consolidated Appropriations Act, 2023 (H.R. 2617), which was signed into law in December 2022, will also have significant implications for the pharmaceutical industry, such as a series of reforms including the Food and Drug Omnibus Reform Act of 2022 (FDORA) and the Modernization of Cosmetics Regulation Act of 2022 (MOCRA). Both of these acts have numerous new obligations for manufacturers and other stakeholders around issues such as marketing, clinical trials, and the FDA’s authority. With 567.35 million units recalled, 2022 had the highest volume of pharmaceutical recalls by unit in over ten years. This was a 114.4% increase compared to the 264.61 million units recalled in 2021.
Cybersecurity threats in medical devices call for more guidance
The FDA announced a proposed regulation in February 2022 to align American medical device manufacturing standards with those of other countries after years of deliberation. International medical device businesses should find it simpler to comply with U.S. regulations as a result of the shift. In April 2022, the FDA released its draft guidance titled “Cybersecurity in Medical Devices: Quality System Considerations and Content of Premarket Submissions,” which details the precautions manufacturers should take to minimize cybersecurity risks as medical devices become more digitally connected. The Consolidated Appropriations Act imposed more rules for device manufacturers in relation to minimizing cyber dangers. Overall, the number of units impacted decreased from 602.51 million in 2021 to 438.37 million in 2022.
Looking ahead
2023 will likely be characterized by the same strict regulatory enforcement that all industries saw in 2022. Many of new regulations and legislation we discuss in the State of the Nation report will begin to impact manufacturers and retailers throughout 2023, requiring increased vigilance to product safety. As regulators bear down on manufacturers, engaging third party experts and maintaining active recall and crisis plans will become increasingly important to protecting your brand’s reputation and bottom line.
Learn more > Discover the full picture on United States product recall data, trends and predications, along with unrivalled insights and analysis from some of our strategic partners in the 2023 State of the Nation Recall Index report – available for download here.