The global regulatory landscape is changing rapidly and becoming increasingly competitive for medical device, pharmaceutical and biotechnology companies. The pressures of the market, technology advances, globalization, and the rapidly shifting needs of consumers continually challenge the medical device industry.
Unfortunately, this rapid change has led to issues and concerns with the quality of products, and has let to an increase of adverse events. According to a McKinsey Report, non-routine quality events (recalls, major observations, consent decrees, and warning letters), as well as the costs associated with lawsuits and product warranties cost the industry an average of $2.5-$5 billion each year.
The expenses accompanying one non-routine quality event have cost medical device companies as much as $600 million. Over the past decade, there was an average of one major quality event each year resulting in stocks dropping by 13% industry-wide.
When news of a recall reach the public, regardless of the details being true or false, word spreads internationally at a faster rate than in years past due to the Internet and social media. The worldwide adverse influence on a company’s stock prices has the potential to be as much as much as -10% after a major quality event. To further the problem, a major recall could potentially have worse implications for a company’s brand in the long-term.
International manufacturers, such as Medtronic, Johnson & Johnson, and Stryker were able to rebound after major recalls. On the other hand, smaller companies, operating within much tighter budgets, don’t always have that recovery.
EngiLifeSciences specializes in compliance, optimizing, and sustainability for driving quality performance and maintaining regulatory compliance. Please contact us today for more information on how we can assist you with this process.
Medical Tracking Solutions, MTS Blog: The Big, Bad, and Ugly Costs of Medical Device Recalls