According to third-quarter recall data from the United States, the number of products recalled this year has officially reached a 20-year high.
According to Sedgwick’s brand protection division’s U.S. product recall index, 1.22 billion units have been involved in recalls across the five industries tracked in the index, breaking the previous record of 1.20 billion set in 2018.
This is the most product recalls in any given year since Sedgwick began tracking recall data more than two decades ago, and it has been accomplished with a full quarter still remaining in 2022. Increases in the average recall size for the pharmaceutical and medical device industries drove the overall increase. The average recall size increased by more than 500% in both industries.
Manufacturers face evolving challenges related to regulatory activity, ongoing geopolitical issues, supply chain disruptions, and an uncertain economic future as the number of recalled products continues to rise.
Sedgwick’s industry-leading brand protection report, released quarterly, provides an in-depth analysis of significant challenges ahead for the automotive, consumer product, food and beverage, medical device, and pharmaceutical industries, as well as insights for mitigating product-related crises. The report provides insights, analysis, and predictions from Sedgwick’s brand protection experts and our network of strategic partners, as well as the most recent product recall data and trends from the third quarter of 2022.
Highlights from third quarter recall data
- While automotive recalls increased by 2.9% (to 252 events), the number of impacted vehicles fell significantly (from 9.21 million in Q2, to 5.23 million in Q3). Only two quarters in the last 10 years have experienced smaller average recall sizes.
- Consumer product recalls experienced a very slight increase to 66 events in the third quarter, up from 65 in Q2 2022. The number of units recalled decreased by 19.2% to 5.43 million in Q3 2022.
- While U.S. Food and Drug Administration (FDA) food and beverage recalls fell 18.3% (to 98 events) in Q3, their average size increased 158.3% to 592,121 units. In contrast, U.S. Department of Agriculture (USDA) food recalls increased by one, to 14 events in Q3 2022, with their average size falling 56.4% to 32,631 pounds.
- Medical device recalls decreased 16.8% in Q3 2022, down to 223 events. However, the number of units impacted increased significantly by 411.0% to 51.48 million.
- While the number of pharmaceutical recalls fell 13.8% to 81 events in the third quarter, year to date, the industry has experienced the second highest number of units recalled on record, with 107.19 million units impacted.
Looking ahead to 2023
As the automotive industry continues to focus on sustainability, the U.S. government passed the Inflation Reduction Act, which offers a slate of benefits meant to increase uptake of electric vehicles. However, manufacturers will face similar supply chain challenges as they work to meet demand. Over-the-air (OTA) updates have increased in prevalence, which make it easier for manufacturers to complete recall requirements. Regulations may be forthcoming as states’ lawmakers and regulators seek to clarify the delivery process for OTA updates.
In the consumer product industry, the Federal Trade Commission (FTC) has taken a leading role in protecting consumers’ ‘right to repair,’ acting against companies that it alleges are restricting consumers’ choices. State governments are following suit, with New York lawmakers working to pass comprehensive ‘right to repair’ laws. Other states and even federal regulators are likely to join the efforts with new laws.
Change may be coming to the food and beverage industry, as some members of Congress have indicated a desire to overhaul food regulation in the U.S. by establishing a single food safety agency. The Food and Drug Administration (FDA) continues to feel the impacts of the infant formula shortage earlier this year, releasing an internal report on its response that offered recommendations for areas of improvement.
In the medical device industry, the Food and Drug Administration (FDA) issued a final guidance that seeks to clarify the types of Clinical Decision Support (CDS) software functions that fall under the definition of “device.” Sections of the guidance may indicate that the FDA will be more active in regulating CDS functions as Software as a Medical Device (SaMD), presenting new challenges for manufacturers.
During the third quarter, the Food and Drug Administration (FDA) appeared to more closely monitor compliance with the Good Manufacturing Practice (GMP) processes, issuing four warning letters to companies in under two months. Increased regulatory scrutiny is likely in the fourth quarter, as the FDA continues remote regulatory assessments and will likely continue to issue warning letters related to over-the-counter drug products and potential GMP violations.
“Regulatory activity did not slow down in the third quarter, and we can expect regulators and lawmakers to continue their close scrutiny of compliance and processes in every industry,” cautioned Chris Harvey, Sedgwick senior vice president of brand protection. “Economic uncertainty and ongoing geopolitical issues, as well as continued disruptions to supply chains, will pose larger risks for businesses. They’ll need to pay close attention to regulatory activity at the state and federal level and routinely evaluate and update their product recall, crisis, and communications plans to account for emerging risks.”
The recall index is published every quarter by Sedgwick’s brand protection experts. It is the only report that aggregates, and tracks recall data across multiple regulatory agencies and industries to help industry stakeholders navigate the regulatory environment, product recalls and other in-market challenges, please visit www.sedgwick.com/brandprotection
To download the latest report, visit the U.S. product recall index report.