J&J reorganises consumer group in wake of recalls

Reuters: Johnson & Johnson (JNJ.N), following repeated U.S. recalls of Tylenol and other nonprescription drugs in the past year, said it will make its U.S. over-the-counter business a separate organization.

The diversified healthcare company’s global over-the-counter business is one of four divisions within J&J’s Consumer Group, along with consumer healthcare, baby products and beauty products.

Under a new consumer organizational structure that takes effect on April 4, the Consumer Group will include a new Global Franchise Organization that consists of four new consumer categories: Skin Care for babies and adults, OTC medicines, Oral Care and Topical Health, and Women’s and Intimate Health. The Global Franchise Organization will conduct research and development, along with other functions, a J&J spokesperson said.

Four regional divisions will be created, each of which will market the various consumer product lines, J&J said.

The only exception will be the North America region, which will market all product lines except over-the-counter medicines sold in the United States.

A separate, newly created U.S. OTC business will handle those sales. It will be headed by Pat Mutchler, a longtime veteran of J&J’s consumer businesses.

The other designated regions will be Asia-Pacific, Europe/Middle East/Africa, and Latin America. J&J said details about the organizational changes were made known to company employees in mid-February, in an internal company memo.

“The regional and franchise structure will enable quicker reaction to changing market conditions and more efficient execution of region-wide initiatives,” while accelerating growth in emerging markets, the memo said.

Weeks later, on March 10, U.S. health authorities said they will have close supervision of three J&J manufacturing plants where quality-control lapses have led to recalls of more than 300 million bottles and packages of J&J OTC medicines. The plants, one of which has been closed almost a year for quality upgrades, are operated by J&J’s McNeil Consumer Healthcare division.

The recalls have included nonprescription medicines such as Tylenol, Motrin, antacid Rolaids and antihistamine Benadryl.

J&J confirmed that Marc Robinson, who had overseen J&J’s consumer healthcare businesses, and Peter Luther, who had been president of McNeil, will be given new assignments. The Wall Street Journal on last week Jesse Wu, the J&J executive who manages all its consumer businesses, told employees in a message reviewed by the newspaper that he was making the changes “in order to give focused attention to quality and compliance, and the critical task of restoring” the reputation of its products.