What's Behind the Current Epidemic of Safety Recalls?

Includes: MAT, RCRC
by: Mark McQueen

In June we learned that a certain wooden boxcar (among other Chinese-made Thomas the Tank Engine products) that has been innocently chewed on, and otherwise enjoyed by thousands of young children has dangerous levels of lead paint, and was being recalled by RC2 Corporation (NASDAQ:RCRC). Justice is served, and its stock is down 25% in the 60 days that have followed.

Then, Mattel (NASDAQ:MAT) discovered that unauthorized paint subcontracting in China brought lead paint into the lives of its child customers, as well. And having recalled nine million toys two weeks ago, it's now come clean on 1.5 million toys that lose their magnets into tiny mouths and ultimately, tummies. Mattel’s shares weather these things far too well, which makes you wonder if a healthy market spanking might ensure it paid more attention to quality control - and not just the price of a landed toy - in its supply chain.

Now, the U.S. Federal Drug Administration has decided, on a preliminary basis anyway, that you should no longer give young children certain medicines. The New York Times keeps changing the text of the story (have the drug company lawyers been calling?), so here is the piece as it was filed on Wednesday:

WASHINGTON, Aug. 15 — In the first major reassessment of the safety of children’s cough and cold medicine in decades, federal drug officials said that the drugs should never be given to children under the age of 2 unless approved by a doctor.

Additional warnings about the drugs could be in the offing, because the Food and Drug Administration announced today that it would convene a meeting of independent experts on Oct. 18. They will to advise the agency about whether new label warnings or prohibitions should be undertaken. The committee will also discuss how well parents and caregivers administer the drugs to children.

In higher than normal doses, cold medicines can affect the heart’s electrical system, leading to arrhythmias. Some medicines affect the blood vessels and, in high doses, have been associated with high blood pressure and strokes. In rare cases, children have been injured when given recommended doses.

The F.D.A. also advised that children should never be given cold and cough medicines that have been packaged for adults and that parents should closely follow label directions about the appropriate dose to give their children.

“Too much medicine may lead to serious and life-threatening side effects, particularly in children aged 2 years and younger,” the advisory stated.

In March, a group of prominent pediatricians and public health officials petitioned the agency to remove from the market medicines intended for children under the age of 6. The petition said that the medicines do not work and that in rare cases they can cause serious injury.

Among the popular medicines covered by the F.D.A.’s advisory are Toddler’s Dimetapp, Infant Triaminic and Little Colds. Like hundreds of older drugs, many of the medicines in these products never received thorough safety reviews by the agency.

The FDA hasn’t reviewed “hundreds of older drugs” currently sold in the U.S.? In my ears rings the advice you’ll often get from a GP: “people generally under-medicate their children.”

The nations of the West have had more than 60 years since the end of WWII to build a reliable, modern government infrastructure, one that is focused more on the taxpayer. Politicians come and go, but there are plenty of 20 and 25 year civil servants, and public servants to provide consistency of oversight in the consumer world. I’m amazed that just 10 weeks ago you could have marched into any mall in North America and purchased cold medicine, James the Red Engine and certain Dora and Diego items for a 3-year old child, only to find out now that this was a terrible idea.

What will we learn 10 weeks from now? That cell phones actually do cause brain damage if used for extended periods of time on the same side of your head? That the toy you buy this weekend shouldn’t have been sold? That sustained iPod earphone use is bad for your hearing? That backseat side airbags are as dangerous to young passengers under 60 pounds as the ones in the front passenger seat of an SUV?

The buck doesn’t seem to stop anywhere on the consumer recall front: that has to change.