Sunday, July 24, 2011

The Business of Health Care Can Make You Sick

The business of health care is not always good for your health, at least if you look at the ongoing problems at Johnson & Johnson (J&J). I've written before about problems with the company's McNeil division, which manufactures many household medicines such as children's Tylenol. Over the past two years, some products manufactured at McNeil have been recalled due to musty odors, inadequate active and inactive ingredients, or metal particles found in some of the bottles.

Ultimately, J&J shareholders sued the company. In response, board members recently filed a 122-page report in federal court that examined what they believe went wrong at the company.

In an article about the report earlier this week, Businessweek's Alex Nussbaum and David Voreacos explained that the trouble seemed to begin when J&J acquired Pfizer's consumer health-care unit in 2006, which added many products to the company and strained manufacturing facilities. Management turnover, staffing cuts, and squabbles between different groups of staff contributed to quality control issues as well, Businessweek reported ("J&J Blames Staff Cuts, Pfizer Deal for Tylenol Recall Flood").

Businessweek pointed out that Johnson & Johnson has recalled a range of products over the past year, including "contact lenses, artificial hips, insulin cartridges and prescription drugs across J&J's 250 subsidiaries." Because so many people use their products, the problems at Johnson & Johnson are everyone's problems. What exactly is in that bottle of Tylenol in your medicine cabinet? That depends on how J&J makes and implements its business decisions.

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