As supply chains become more diverse and regulatory environments more complex, U.S. pharmaceutical recalls remain on track to reach the highest number of annual recalls in more than ten years, according to the latest edition of Sedgwick’s Quarterly Recall Index Report.
 
Chris Harvey, Senior Vice President of Brand Protection for Sedgwick shares the latest recall data, product safety, and regulatory developments, as well as how businesses can protect themselves from risks associated with new regulations as we prepare for 2024.
 
Contract Pharma: Please share a few key highlights from the quarterly recall report on data and trends for the pharmaceutical industry.
 
Chris Harvey: While the number of U.S. pharmaceutical recalls fell 20.7% from 2Q to 3Q 2023, the industry remains on track to reach the highest number of annual recalls in more than ten years. That is because 1Q and 2Q were record-setting quarters for the number of recalls with 144 and 135 events respectively. Those figures are well above the five-year industry average per quarter of 84.7 recalls. In 3Q, there was a total of 107 pharmaceutical recalls. Sterility was the dominant cause of pharmaceutical recall activity, accounting for 45 events and 4.1 million impacted units. Thirty of these recalls involved a single company. As we also saw in most other industries, the number of impacted units decreased significantly in the pharmaceutical industry, from 24.2 million in 2Q to 7.4 million in 3Q. Only two quarters – 4Q 2022 and 3Q 2018 – in the past five years have recorded fewer impacted units.
 
Contract Pharma: What are the economic, regulatory, and legal developments shaping product safety in the pharmaceutical industry?
 
Chris Harvey: Over the past several quarters, we have seen an increase in regulatory oversight as the Food and Drug Administration (FDA) and other regulators work to incorporate new technologies like artificial intelligence and machine learning (AI/ML) into existing frameworks. Cosmetics, tobacco, cannabis and its derivatives, electronic nicotine delivery systems (ENDS), and supplements are all getting more attention from regulators as more rules are implemented around the manufacturing and distribution of these types of products. Although the FDA delayed enforcement of certain obligations under the Drug Supply Chain Security Act (DSCSA), electronic traceability is here to stay to protect manufacturers and consumers from product safety concerns associated with the presence of counterfeit or illegitimate drugs in the market. 
 
Contract Pharma: What are the main causes resulting in pharmaceutical recalls? What safety risks top priority lists?
 
Chris Harvey: Sterility was the leading cause of pharmaceutical recalls for the second consecutive quarter and accounted for 42.1% of events. The second most commonly cited cause for pharmaceutical recalls was ‘Failed specifications,’ which was cited in 16 events and includes impurities and issues with product stability, among other concerns. cGMP deviations were a close third, cited in 13 events. Historically, these are always the three most common causes for pharmaceutical recalls. The 3Q recalls all point to increased scrutiny and oversight as regulators are working diligently to ensure the quality and safety of products in the market, especially amidst ongoing drug shortages.
 
Contract Pharma: How can businesses protect themselves from risks associated with new regulations as we prepare for 2024?
 
Chris Harvey: Throughout the year, the FDA has issued multiple guidances to help companies navigate new regulations. While these documents are suggestions and not themselves enforceable, they can help businesses determine what the agency will prioritize, definitions for key terms in new or existing rules, and suggestions for complying with the laws. Another step businesses can take is to treat recall preparation as an ongoing effort and part of an organization’s standard operations, not something done ad hoc when a crisis hits. Establishing a recall plan is a must, especially since the FDA itself has urged companies to be “recall ready.” It is also important for businesses to regularly run mock recalls and test their plans for gaps. Additionally, as consumers take more of an interest in product recalls, businesses should make an effort to build their team of third-party experts to support with crisis communications, brand protection, and litigation to manage their reputation not only with regulators but also in the court of public opinion.