Weldon preps for Congress; denies "systemic" J&J quality problem

CEO Bill Weldon (photo) says he can assure Johnson & Johnson customers that the Tylenol recalls, about which he is expected to answer to in a congressional hearing Thursday, are not indicative of a "systemic problem." In fact, he's had all of the healthcare product giant's 120 manufacturing facilities around the world checked "to ensure that we didn't have a problem like we had at the [Fort Washington, PA] facility."

In a CNBC interview with Maria Bartiromo earlier this month, he says also that following the post-recall facility shutdown, he "put new management in." And he has "put somebody in charge of supply chain for J&J" who reports "directly to me." That individual--corporate VP for supply chain operations Ajit Shetty, appointed in August--"has both quality as well as the manufacturing side of it coming to him, so we'll ensure that everything is in good shape."

Plans at that time called for chief quality officers at each of J&J's three major divisions--pharmaceutical, medical device and consumer groups--who would report to Shetty. McNeil in March had appointed former J&J global pharma quality ops exec Veronica Cruz as VP for quality assurance, following the Tylenol musty-odor recall.

Not to split hairs, but Weldon's recall response appears to be the kind that would follow discovery of a systemic problem. Even if the 120-facility check turned up no particular themes, the institution of a J&J-wide supply chain czar, overseeing all business units, implies a systemic cure.

"Evidence speaks for itself," says Donald Riker, president at healthcare industry consultancy On Point Advisors. J&J has "embarked on a review of its entire operation and appointed a senior manager over all QA, presumably changing reporting relationships, hiring new people, putting in new SOPs." Riker in July called the Tylenol recalls a "rolling blackout," possibly the result of a "systemic failure."

Riker advises caution on having both manufacturing and quality operations report to the same individual. "QA should not report into a manufacturing hierarchy per se; it is a conflict of interest," he says via email. It's best for the quality group to report to the CEO, an executive VP, or R&D leadership. "If it reports to a senior manager who also manages operations, that's OK if the senior manager is not tasked with running operations and preferably doesn't have the background or day-to-day decision-making responsibility."

- here's the CNBC interview

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