The medical devices industry is affected globally by product recalls. Reports by leading governing bodies, such as the FDA and MHRA, show that the number of recalls in medical devices has increased dramatically over the last decade. There are many reasons for this increase, from the growing globalisation of supply chain, to increases in software components leading to more design failures. Regardless of the causes, product recalls can be a dangerously costly in many ways and, with the rise in communication and social networking, are more visible today than ever before.
There are two types of product recall. The first is voluntary recall: A company discovers an issue with one of its products and recalls the product itself. The second is involuntary recall: This occurs when a regulator raises a concern, and the company is made to recall their product. Medical device recalls are occurring more and more and can be huge expense to the company largely because it is not planned. So what are the dangerous costs lurking behind product recalls?
1) Short-term. The direct financial expenses a business can face during a product recalls.
2) Long-term. Indirect but dangerous costs of product recall.
Product recalls are not uncommon within the Life Science industry as a whole and medical devices in particular; the most prestigious companies in the industry can be affected, often with a larger impact due to the wide spread nature of their distribution and the quantity of products they produce.
The cost can often be great, regardless of company size, due to the fact that recalls are often unplanned. A recall can also have a longer term financial effect through indirect costs of business loss and tarnished brand recognition. It is important that companies are aware of the dangers and cost of product recall. In our next blog we will address how a company can do their best to avoid these dangers.
By Lucy Excell at 10 Feb 2016, 16:01 PM