Case 9.5
Tylenol: the product and its packaging safety
Twenty-three-year-old Diane Elsroth died after taking a Tylenol capsule laced with cyanide. Within five days of her death, more people died from taking tainted Tylenol purchased from stores in the Chicago area. After the Chicago poisonings which were never solved, McNeil and Johnson & Johnson executive were told at a meeting that processes for sealing the capsules had been greatly improved, but no one could give the assurance that they were tamperproof. The capsule form of the pain reliever represented 30 percent of Tylenol. Tylenol in capsule form worked faster than Tylenol in tablets.
Jim Burke, CEO of Johson & Johson told the others that without a tamperproof package for the capsules, they would risk the survival not only Tylenol but also Johnson & Johson. The executive decided to abandon the capsule . Frank Young, a food and Drug Administration commissioner, stated at the time, “This is a matter of Johnson & Johnson’s own business judgement, and represents a responsible action under though circumstanes.
Johnson & Johnson quickly developed “caplets”-tablets in the shape of a capsule then offered consumers a coupon for a bottle of the new caplets if they turned in their capsules. Within five day of the announcement of the capsule recall and caplets offer 200,000 consumers had responded . Johnson & Johnson had eliminated a key product in its line, one that customers clearly preferred in the interest of safety.
Within one year of the Tylenol poisonings, Johnson & Johnson regained its 40 percent market share for tylenol. However it is interesting to note that McNeilwas able to have its new product and packaging on the shelves within weeks of the fatal incidents. There had been some preparation for the change prior to the facilities, but the tragedy was the motivation for the change to safer packaging and product forms. Tylenol is a stunding source of revenue for McNeil and Johnson & Johnson, with revenue totals growing at double-digit rates as Tylenol expands market presence into 5,000 convenience stores with new and smaller packaging of its product and its new formulassuch as Tylenol PM. In 1997, Tylenol added a new label to its infant Tylenol “Taking more than the recommended dose… could cause serious health risks” because of liver damage in children. From this chapter we know that only the manufacturer knows the result of its safety tests on a product, only the manufacturer can correct defects or recall dangerous products. Product liability represents one of the issues at the heart of ethical and socially responsible behavior for business.