By Chris Harvey, VP, crisis solution
More than 900 million units of vehicles, food, drugs, consumer products and medical devices were recalled during the first quarter of 2022.
This is the highest number recalled in a single quarter over the past 10 years, as reported in our latest edition of the U.S. Recall Index report.
Even as businesses adjust to the challenges arising from the COVID-19 pandemic, new problems continue to emerge as a result of chaotic geopolitical events and from volatile financial markets. Additionally, U.S. regulators are continuing to increase enforcement activity and stricter scrutiny over the five key industries analyzed in the report: automotive, consumer product, food and drink, pharmaceutical, and medical device.
Our latest report includes analysis of recall data from Q1 2022 and a look ahead at Q2 data from April. We’ve also included insights and predictions from several of our strategic partners at leading law firms in the U.S. to help your business understand and prepare for the challenges your industry may face in the rest of 2022.
Despite increased regulatory activity, automotive recalls fall below 2021 quarterly averages
During the first quarter, the National Highway Traffic Safety Administration (NHTSA) issued a final rule amending certain Federal Motor Vehicle Safety Standards (FMVSS) for vehicles with Automated Driving Systems (ADS) and signaled an intention to update the FMVSS that applies to high-voltage batteries used in electric vehicles. Despite these safety-focused regulatory moves, there were only 221 automotive recalls, which is below the quarterly average for 2021. However, the number of units impacted increased significantly — by 114% — to 9.3 million units.
CPSC flexes its enforcement powers with a focus on children’s products
In March 2022, the annual study from a consumer product nonprofit found that there were 14 deaths related to children’s products in 2021, up from zero in 2020. The number of reported injuries and incidents also increased significantly, prompting the organisation to call for the CPSC to do more to protect the safety of children. The number of reported incidents continued to increase in the first quarter of 2022, up 116.5% from Q4 2021 numbers.
Consumer-product recalls also increased nearly 64% to 77 events and more than 6.9 million units were impacted. The The Consumer Product Safety Commission (CPSC) continued to publicly call out companies for failing to comply with safety reporting requirements, including issuing an administrative complaint for an infant lounger company and levying a multi-million civil penalty against a workout equipment manufacturer. Given this emerging trend, businesses should be aware of the increased risks associated with a failure to report safety issues.
Infant formula shortage prompts FDA to conduct a programmatic review of its practices
The U.S. Food and Drug Administration’s (FDA) actions in the first quarter indicated that a focus on general food safety and enforcement of the Food Safety Modernization Act (FSMA) were priorities for 2022. However, following the two deaths tied to a large recall of infant formula, the FDA may be switching its focus. The formula recall and resulting shortage prompted the FDA to announce that it would conduct a programmatic review of agency programs and policies related to infant formula and special medical food complaints, illnesses and recalls.
While FDA recall activity fell slightly in Q1 2022 to 110 events, the number of units impacted increased a staggering 274% to 147.4 million units. This is related to four large recalls, including the infant formula recall and a recall of caffeine supplements over quality issues.
FDA works to harmonize U.S. quality system requirements with international standards
After several years of background activity, the FDA published a proposed rule to align its Quality System Regulation (QSR) with international standards for current good manufacturing practice for medical devices. While this move will help ease the burden of compliance for manufacturers who operate in multiple countries, the short implementation period has prompted concern from many in the medical device industry.
Perhaps a sign that the impact of COVID-19 on the medical device industry is easing, recalls fell slightly in Q1 2022 to 200. One recall event impacting 288 million units caused the total number of units impacted by recalls in Q1 to increase to 314.8 million.
FDA turns attention to making prescription drugs less expensive
While the FDA finally has a permanent Commissioner after more than a year, the agency’s focus in Q1 was making prescription drugs more affordable. The FDA has issued a proposal towards that end and taken steps to clarify the processes around application submissions, labeling, and review for generic drugs. In the first quarter, there were more than 435 million units recalled in the pharmaceutical industry – the largest number of units recorded in nearly 15 years. The number of recall events increased to 94 in Q1 2022, from 66 in Q4 2021.
Looking ahead
If the first quarter was any indication, the five key industries analyzed in the report can expect to see increased regulatory and enforcement activity throughout 2022. In addition to these risks, emerging situations across the globe may lead to new supply chain disruptions and product shortages. Before these shocks occur, companies should ensure their supply chains are protected against disruptions and that they are monitoring the potential regulatory changes that may come.
Companies needn’t prepare for these risks alone. Engaging third party experts can help businesses save money, protect their reputation, engage positively with regulators, and service customers to the level they expect.
Get more recall data, trends and predictions, along with additional insights and commentary from some of our strategic partners in the latest edition of our recall index report – available for download here.