It’s budgeting season, and most leaders are hoping and planning for a banner year. New product developments. Innovative strategies. Expanded market share.
Everyone hopes they will avoid any sort of crisis in the coming year, and as a result, few plan for one. But one of the most disruptive crises medical device and pharmaceutical companies will face is also among the most likely – product recalls. Consider this:
Through Q3 2017, 144 companies experienced more than one pharmaceutical or medical device recall. Of those, nearly one in five hadn’t issued a recall in three years. Looking at the number of units recalled, the contrast is even clearer: just under one in three companies who issued recalls of more than 100,000 units hadn’t experienced a recall – of any size – in three years. The data is undeniable: companies can get hit with multiple and large recalls at any time.
Preparation is crucial. That includes developing and testing a comprehensive recall plan in advance. For any company that hasn’t experienced a recall in the last year to 18 months, incorporating preparedness and mock recalls in next year’s budget is vital to success. New regulations must be taken into account. Previous employees overseeing past recalls may have moved on to other roles. And those who have never experienced a recall risk wading into the murky regulatory waters for the first time. Taking a chance that the streak will continue is akin to playing recall roulette.
In addition to recall planning, it is also helpful to account for recall execution in your budget. Determining how to do that may require expert guidance, but leaders can start by asking themselves a few questions: What are your remedy options? Do you have the infrastructure to manage the affected products? Will you need assistance with any or all the steps of the recall life cycle? Soliciting help from outside partners can be beneficial in the long run to help avoid lasting brand damage, legal liability, and regulatory fines.
But how do you make the case for a cost you aren’t 100% sure you’ll need? Consider the impact of managing internally. Which employees will be involved in the process, and how many hours will they need to put in? What projects will be stalled or delayed as a result? What will the stakeholder reaction look like if a sudden, large recall hits and ends up playing out negatively in the press? As with any line item in the budget process, being armed with the facts and figures can increase the odds of approval. And in the case of product recalls, they are not a matter of if, but when.
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Read our latest blog discussing Lithium-Ion batteries and they risk they pose during a medical device recall here:… https://t.co/DJESBfWlQy
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