The Tylenol Controversy

( Although these days, car makers are regularly recalling defective vehicles, in the 1980s it was unheard of. The story of first product recall in history.)

Tylenol ( acetaminophen) is a drug for fever, manufactured by Jhonson and Jhonson. It’s a fast cousin of our crocin etc. 

In the 1980s, it was the leading pain-killer medicine in the United States. Till early 1982, Tylenol controlled 37 percent of pain-killer market of US. It’s annual  revenue was about $1.2 million. 

Then..

On Sept. 29, 1982 seven people died in Chicago after taking Tylenol. And in a blink, Tylenol market share plummeted from 37 to only 7 percent. 

Subsequently it was found out that the suspected capsules were cyanide-laced. An unknown suspect had put 65 milligrams of deadly cyanide into each killer Tylenol capsule with malicious intention, 10,000 times more than what is necessary to kill a human.

But enough damage had been done by that time. The blame was square on the company. It had to redeem itself from the scandal.

Although Johnson & Johnson knew they were not responsible for the tampering of the product, it was faced with the dilemma of the best way to deal with the problem without destroying the reputation of the company and its most profitable product. They had only two months.

What they did had now had become a landmark case study in business Schools.

Barely two months later, Tylenol again headed back to the market. A year later, its share of the $1.2 billion analgesic market had climbed back to 30 percent.

…. ….

Although Johnson & Johnson knew they were not at all responsible for the tampering of the product, they assumed full responsibility and recalled all of their capsules from the market. 

This product recall from the entire country amounted to about 31 million bottles and a loss of more than $100 million dollars. They also halted all advertisement for the product. Though all through they knew that their product is not at all defective.

It was a responsibility first to the consumers and medical professionals using its products, next to it’s employees and lastly to the shareholders.

It was the first product recall in the history of business.

Result: Johnson and Johnson still today is a leader in it’s market.