U.S. product recalls fall during Q3 even as regulatory scrutiny increases

Sedgwick brand protection releases Q3 U.S. Recall Index report

MEMPHIS, Tenn., Nov. 16, 2023 /PRNewswire/ -- U.S. product recall activity recorded it largest quarterly decline in over three years, as events fell by more than ten percent between Q2 and Q3 2023.  According to Sedgwick brand protection's latest U.S. Recall Index report, there were 740 product recalls in Q3 2023, which is 13.6% fewer than the 856 recorded in Q2 2023. Despite this third quarter decline, 2023 still remains on track to hit a five year high for total recall events.

The number of defective units recalled in Q3 2023 also fell significantly, decreasing 61.9% from Q2 2023. This brings the year-to-date total number of recalled units in 2023 to 528.7 million, which makes it unlikely that 2023 will become the third consecutive year with more than one billion units recalled. However, that feat is not impossible, considering each of the last three years has experienced a quarter with more than 400 million units recalled.

Released quarterly, Sedgwick's industry-leading Recall Index report offers in-depth analysis of the latest product recall data, safety regulations, and key challenges for the automotive, consumer product, food and drink, medical device, and pharmaceutical industries. Featuring unrivaled analysis and exclusive perspectives from Sedgwick's brand protection experts and network of strategic partners, the Index is a key resource in helping mitigate recall risk, litigation, and reputational damage caused by product crises and in-market events.

Product recall highlights from Q3 2023

• Automotive recalls decreased 15.8%, from 234 in Q2 2022 to 197 in Q3. The number of units impacted also fell from 8.2 million units recalled in Q2 to 7.9 million units in Q3. Electrical systems were the leading cause cited for automotive recalls for the third consecutive quarter.
• The number of consumer product recalls fell 14.5% from the previous quarter, while the number of units impacted decreased a more significant 58.0%. The U.S. Consumer Product Safety Commission (CPSC) issued fines in excess of $20M in Q3, pushing the year-to-date total to $55.3M, which exceeds the total annual fines for all other years on record.
• U.S. Food and Drug Administration (FDA) recalls fell from 153 in Q2 2023 to 131 in Q3, while the number of units impacted decreased 64.8% from the previous quarter. Notably, the U.S. Department of Agriculture (USDA) was the only sector where the number of recalls increased in Q3 2023, from 17 in Q2 to 18. The number of pounds recalled by the USDA also increased to 467,811 pounds, 28% more than the previous quarter.
• The medical device industry saw recall events fall just 7.9% from the previous quarter, with quality concerns remaining as the leading cause. The number of units impacted fell a more significant 63.1%, from 66.4 million in Q2 2023 to 24.5 million in Q3.
• The number of pharmaceutical recalls went from 135 in Q2 2023 to 107 in Q3, a decrease of 20.7%. Despite this decline, 2023 remains on track to reach a ten year high in terms of pharmaceutical recall events.

Looking ahead to 2024

• Automotive: As regulators and legislators continue to push for the transition to electric vehicles (EVs), the automotive industry will face resistance from consumers who are concerned about a lack of charging infrastructure and the price of EVs. Automotive advancements will be a focus across the industry, as legislators consider rules for autonomous vehicles and contend with increased safety risks associated with driverless technology.
• Consumer product: The U.S. Consumer Product Safety Commission (CPSC) and other consumer product regulators are expected to remain aggressive in their enforcement actions against companies in violation of product safety regulations. The use of new technologies like artificial intelligence in consumer products will remain top of mind for regulators as they determine how to advance innovation while protecting consumers from potential safety risks.
• Food and drink: The U.S. Food and Drug Administration (FDA) continues to look for ways to move forward from the 2022 infant formula crisis as it advances the proposed restructuring of its Human Foods Program. While the agency aims to provide greater efficiency and transparency with the restructuring, industry stakeholders may face some bumps with the process as the FDA shifts responsibilities to new offices.
• Medical device: As the FDA's Center for Devices and Radiological Health (CDRH) looks for ways to increase patient access to at-home-use medical technologies, manufacturers should note that the agency is also prioritizing stricter enforcement around "intended use creep." While the FDA's efforts to increase access to care may result in better patient outcomes, manufacturers should take extra care to ensure they remain in compliance with safety regulations.
• Pharmaceutical: In the pharmaceutical industry, the FDA has turned its attention to cosmetics manufacturers as it seeks to regulate cosmetics in much the same way as it does drugs. The FDA delayed enforcement of certain obligations under the Drug Supply Chain Security Act (DSCSA) by one year, but stakeholders should take this opportunity to ensure compliance with the regulation as additional oversight is expected from the FDA.

"While the number of recalls decreased during the third quarter, regulatory oversight continues to expand across all industries," said Chris Harvey, Senior Vice President of brand protection for Sedgwick. "As businesses prepare for 2024, it is critical that they plan – and practice – for a product recall or other in-market event."

To download the latest Recall Index report, visit Sedgwick's U.S. 2023 edition 3 Recall Index page.

The Sedgwick brand protection Recall Index is published every quarter. It is the only report that aggregates and tracks recall data across multiple regulatory agencies and industries to help stakeholders navigate the regulatory environment, product recalls, and other in-market challenges. For more information on brand protection, visit  http://www.sedgwick.com/brandprotection

About Sedgwick
Sedgwick is a leading global provider of technology-enabled risk, benefits and integrated business solutions. The company provides a broad range of resources tailored to clients' specific needs in casualty, property, marine, benefits, brand protection and other lines. At Sedgwick, caring counts; through the dedication and expertise of 31,000 colleagues across 80 countries, the company takes care of people and organizations by mitigating and reducing risks and losses, promoting health and productivity, protecting brand reputations, and containing costs that can impact performance. Sedgwick's majority shareholder is The Carlyle Group; Stone Point Capital LLC, Caisse de dépôt et placement du Québec (CDPQ), Onex and other management investors are minority shareholders. For more, see sedgwick.com.

SOURCE Sedgwick