Wednesday, August 24,1983/The Battalion/Page 19
'ylenol on top
scare
nited Press International
. ‘ NEW YORK — “I was kind of
•tewasthe ipiag this anniversary would
at 'k and wtlaway, to tell you the truth,”
1 ofaballpBlBoard Chairman James
threwafei Jrke of Johnson & Johnson.
^ e api(chfr]lt was last Sept. 29 that the
Woody I st ol seven Chicago residents
ce in aqiiar<Bn agony from cyanide in-
■l in Tylenol capsules, the
»l their r^B ry ’ S mOSt P°P ular P ain i e ‘
'' ^ The deaths and the resultant
"f jtional panic, which prompted
M ^company to withdraw Tyle-
Hom the market temporari-
toadd tamperresistant pack-
H, are still raw in the mem-
lof officials at Johnson &
hnson s corporate headquar-
I I i r' n ^ ew ^ riinsw ' c ^> N.J.
I C J Before the cyanide scare,
l82|ooked to show record pro-
™jfor the pharmaceutical
nt.
The annual report instead
is titled, “An eventful year,”
d its cover featured a tiny pic-
Jof a Tylenol bottle. No
fcr comment seemed neces-
>’•
There may never have been
ite a comparable trauma,
ine cabinets throughout
)untry were stripped of
delol. Even David Clare,
hnson & Johnson’s president,
IHted he had “some hesita-
m" the first time he tried to
j|Bw a Tylenol after the inci-
nts.
“It isn’t that easy to put be-
s,” Burke said in an inter-
H“It still permeates the com-
hurler Ve#)f ^ Llt no on e’s obsessed with
:t 0 ryin F IJ m f ore -’’ . f
tragedy in tact turned
SHHR'i be a triumph of sorts for
hnson & Johnson, justifying
: company’s faith in its own
put ation and management
“1 definitely think Johnson &
on is as strong as before,”
j§oellen Fisher, an analyst
the investment house of
gan Stanley. “If anything, it
solidified the company’s cor-
Te strategy and their confi-
ce and ability to deal with
sity.”
ylenol sank from 35 percent
1 pain reliever market share
7 percent after the Chicago
iers. Johnson & Johnson’s
Research showed half their
r users did not intend to
ti e product again.
"t, 10 months after its re-
to the market, Tylenol is
again the Jeading pain re
in the nation, having re-
red about 80 percent of its
tarket share.
“It s been a remarkable recov-
said Joseph France, who
|ks the drug trade for Smith
irney. “Sales have picked up
at a more than $400 million
tef
He loss of Tylenol sales was
t Johnson & Johnson’s only
iuma this year. In March, the
my recalled its prescrip-
nalgesic Zomax after re
surfaced of fatal allergic
ictions to the drug,
hey immediately pulled it
the market, at an enormous
nings penalty,” said France,
(^estimated the Zomax with-
wal cost Johnson & Johnson
million in U.S. sales.
The company recently re
tted June quarter profits of
1.5 million, about even with
same period last year. Sales
TeSl.5 billion, up 4 percent.
If Johnson & Johnson’s pro-
were somewhat disappoint-
rthe flat earnings were due
re to mundane problems like
strong U.S. dollar than to
lenol repercussions, analysts
id.
JFhis is a company that’s real-
seriously affected by currency
aversions,” said Ms. Fisher.
Johnson 8c Johnson’s re-
N
B
FED,
titv
sponse to the Tylenol crisis was
both conservative and radical. It
moved quickly to shore up its
reputation as a reliable family
friend, and made it clear it was
willing to risk a great deal of
money to do so.
“They did a very good job,”
said Bruce Miller, senior vice
president at Rabin Research
Co., a Chicago marketing con
sultant. “They operated very
quickly. They were able to re
capture consumer confidence
by being very straightforward,
and going to the heart of the
matter—which was packaging.”
Johnson & Johnson immedi
ately recalled all Tylenol cap
sules on the market, at a pre-tax
cost of $100 million. It tested
more than 8 million capsules,
and fielded more than 2,000
calls from the press in the days
following the poisonings.
Six weeks after the tragedy,
the company announced it was
reintroducing Tylenol in a new
triple-sealed container.
Once the safety issue had
been addressed, the company
moved to get Tylenol back in
America’s medicine cabinets
quickly — before consumers re
placed their hastily-discarded
bottles of pain reliever with a
competitor’s brand.
The tragedy turned
out to be a triumph of
sorts for Johnson &
Johnson, Justifying
the company’s faith in
its own reputation and
management policies.
Johnson & Johnson virtually
offered a free bottle of Tylenol
to any household that wanted
one. It blanketed the country
with newspaper coupons good
for $2.50 off the price of Tyle
nol — making the smaller bottles
cost-free. A special hot line
accepted calls from consumers
who wanted coupons.
Meanwhile, 2,250 Johnson 8c
Johnson sales people made
more than 1 million visits to
physicians and other medical
personnel, seeking support for
the Tylenol reintroduction.
The company regarded sup
port from the medical commun
ity as crucial since most Tylenol
users first received the pain re
liever in a hospital or reported it
was recommended by a doctor.
If he had to do it again, Burke
says, he isn’t sure he’d do any
thing differently, although he
admits the individual decisions
made in the days following the
tragedy are a blur.
“The thing that makes us feel
best is — our philosophy of
doing business was vindicated.”
Johnson 8c Johnson is a de
centralized company which per
mits a great degree of freedom
to its individual units.
The company has a credo,
written by late J&J Chairman
Robert Wood Johnson, which
stresses the social responsibility
of business.
“Every time business hires,
builds, sells or buys it is acting
for the people as well as for itself
and must be prepared to accept
full responsibility,” it says in
part.
Burke, who has made credo
indoctrination sessions a re
quirement for new management
employees, referred to the prin
ciples constantly when he
announced Johnson 8c John
son’s comeback plans last
November, and urged consum
ers “not to allow our lives to be
ruled by acts of terrorism.”
These days, he suggested, the
credo seems less saccharine,
“more pragmatic.”
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