Alere, a prominent international diagnostic-based health solution that is traded publicly, recently recalled close to 900 thousand health tests they manufactured. This recall was initiated immediately after an inspection of Alere’s plants that was performed by the United States Food and Drug Administration (FDA). While drug recalls are instituted to protect the public from faulty or dangerous medications and pharmaceuticals, it is unfortunately always the case that some individuals are harmed before the recall occurs. Our Illinois drug recall attorneys are experienced in assisting these injured persons, and consistently obtain immense awards for our clients.
Alere sells its medical diagnostics products in more than 23 different countries. The products involved in this particular recall were Triage BNP tests, Triage cardiology panel tests, and Triage D-dimer tests. These tests are essentially drug test kits and preventative heart-attack test kits. Alere recalled $456 thousand BNP tests, $247 thousand drug tests, and $192 thousand cardiology tests.
These recalls were extremely financially damaging for Alere. Prior to the
recalls, the tests that were recalled brought in revenue of over $70 million
for Alere in the first quarter of this year alone. This is not only damaging
to the company and its employees, but also to its shareholders because
Alere is a publicly traded company. As a result of these recalls, the
company’s stock fell 9 cents per share in 2012, with an estimated
additional decrease of 35 cents per share.
In addition to the financial impact, the recalls led to a major shortage of these test. This shortage was especially noticeable because Alere commands such a large percentage of health diagnostic test market. Alere was fully aware of the consequences of initiating these recalls, but made the conscious decision to do so in spite of the downsides.
The recall was initiated following a report from the FDA that the company’s San Diego manufacturing plant was not meeting certain quality control release method requirements. The company has already begun to re-manufacture all of the tests that were recalled. While this increased manufacturing will help stagnant profits, they come at a higher cost because the FDA’s report actually increased the manufacturing costs for Alere.
Even though the FDA did not mandate Alere to recall these products, Alere did so out of self preservation. Although the cost of these recalls was great, the cost is minuscule in comparison to the liability they would face from the hundreds of thousands of private individuals that would have been injured by the manufacturing defects.
Instead of immediately chastising these large medical and pharmaceutical companies for their recalls, there is a logical and arguably justifiable rationale behind it. The United States is among the most litigious countries in the world, meaning there are more lawsuits filed here than anywhere else. Furthermore, American juries are notorious for awarding extremely large damage awards, especially when the defendants are large and lucrative corporations.
As a result, these corporations have decided that even if the manufacturing defects are not truly going to harm their consumers’ health, it is better to recall them than face immense liability. Obviously, the impetus for recalling defective products that are actually dangerous is to protect its consumers. But often times, the worst side effects that would result from manufacturing defects are very minor: diarrhea, constipation, nausea, headaches.
The only way to reedy the dangers of manufacturing defects and the shortages of the products are recalled is to increase the quality control standards. Realizing this, the FDA has instituted increased requirements, which have caused elevated costs for Alere to re-manufacture the diagnostic kits they recalled. If you or a loved one has suffered from medicine or pharmaceuticals that were later recalled, contact an attorney immediately.