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May
07

U.S. Government Shutdown Drives Down Product Recalls

FOR IMMEDIATE RELEASE

Stericycle Expert Solutions’ Recall Index shows halted safety inspections reduced U.S. recall activity across all industries in the first quarter of 2019

Indianapolis, IN – May 7, 2019 – Product recalls declined significantly across all industries for the first time since at least 2012, according to the first quarter 2019 Recall Index released today by Stericycle Expert Solutions (NASDAQ: SRCL). The declines were largely due to reduced oversight from the government shutdown earlier this year which stopped or limited many government safety inspections for food, pharmaceutical, automotive, medical device, and consumer products, the industries tracked in the Stericycle Recall Index. When the shutdown ended at the end of January, it took several more weeks for the regulatory agencies to ramp safety inspections back up to normal levels.

“While it’s usually good news for consumers when recall rates decline, the Q1 2019 numbers are misleading,” said Chris Harvey, Director of Recall Solutions at Stericycle Expert Solutions. “Fewer inspections mean more potentially dangerous products entered the market unnoticed during this period, which could also have an impact in the months ahead. Having a recall plan in place could never be more important as we track the repercussions.”

Consumer Product Recalls Hit 12-Year Low
The consumer products industry saw significant decreases across the board including the number of recalls, the volume of recalled units, and the number of reported incidents. There were 39 product recalls in Q1 – a 43.5 percent decrease – while recalled units decreased 67.3 percent to 1.8 million. Both of these totals are the lowest quarter since at least 1997.

Electronics were the top consumer product category for recalled units, while the main hazard was fire. Fire has been the top hazard for both the number of recalls and recalled units for four of the last five quarters.

Airbag Headaches Continue
National Highway Traffic Safety Administration (NHTSA) recalls decreased 6.8 percent to 205, which is higher than four of the last seven quarters. However, the number of units increased 387.4 percent to just over 24 million – the highest quarter since Q2 2016.

Faulty airbags continue to impact recall rates, with airbags and service brakes tied as the top cause for recalls at 12.2 percent each. Airbags were the top recall category for recalled units at 73.6 percent. The last time any automotive category comprised that high of a percentage was Q1 2017, when nearly three-quarters of all recalled units were airbags.
Automobiles accounted for 91.7 percent of recalls and 52.1 percent of recalled units. Nearly 80 percent of automobiles recalled (based on VINs) were from just five auto makers.

Manufacturing Woes Impact Drug Recalls
Pharmaceutical recalls decreased 7.8 percent to 94, and recalled units decreased 75.3 percent to just under 13 million – lower than six of the last nine quarters.

Failed specifications and deviations from current Good Manufacturing Practices (cGMPs) drove drug recall activity in Q1. For the 11th consecutive quarter, failed specifications were the top cause of pharmaceutical recalls, while cGMP deviation was the top cause for recalled units.

Some pharmaceutical companies experienced multiple recalls in Q1 2019. Four drug makers reported at least five recalls each in the quarter – the highest number since Q3 2013.

Medical Device Maladies
Medical device recalls decreased 41.4 percent to 164, which is the lowest since Q4 2017. Recalled units decreased 16.2 percent to just under 135 million devices. More significantly, there were more than one million Class I units recalled for the third consecutive quarter. Class I devices pose the greatest risk to the public.

Quality issues were the top cause of recalled units at 51.2 percent. This is the first time quality issues were the top cause since Q3 2016. The average medical device recall impacted 823,126 units, making it the highest quarter since 2006.

Look Before You Cook
Food and Drug Administration (FDA) recalls fell 36.5 percent to 99 – the lowest quarter since Q1 2016. Recalled FDA food units increased 67.2 percent to 79 million, which is higher than four of the previous five quarters. For meat and seafood products, United States Department of Agriculture (USDA) recalls decreased 7.1 percent to 39, while total pounds of food decreased 91.6 percent to just over 1.4 million.

The report found that plastics continue to infiltrate the food supply. Foreign materials in food were the top cause of USDA recalled pounds at 37.9 percent, with plastic, the most common foreign material, being found in 40 percent of the foreign material recalled pounds.

Under the FDA’s watch, undeclared allergens were the top cause of both FDA recalls (38.4 percent) and recalled food units (98.1 percent). More than 17 percent of FDA recalls were products distributed nationwide – the second highest since Q4 2016.

The full Q1 2019 Recall Index is available at http://recallindex.stericycleexpertsolutions.com/q1-2019

For media inquiries, contact:
Jeff Aubin, Brodeur Partners
617-587-2928, jaubin@brodeur.com

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