U.S. product recalls fall in five key industries during Q2 2024

News provided by

Sedgwick Claims Management Services, Inc.

Aug 27, 2024, 09:00 ET

Sedgwick brand protection releases Q2 2024 U.S. Recall Index report

MEMPHIS, Tenn., Aug. 27, 2024 /PRNewswire/ -- U.S. product recalls fell in the second quarter of 2024 across five key industries according to Sedgwick brand protection's latest U.S. Recall Index report. There were 788 recalls across the automotive, consumer product, food and drink, medical device, and pharmaceutical sectors, representing a 13.3% decrease from Q1 2024. For context, Q1 2024 recorded the highest single-quarter recall total in more than five years, so this latest decline is not unexpected.

In contrast, the number of defective units increased 96.4%, from 129.6 million in Q1 2024 to 254.6 million in Q2 2024 across the five industries. This is the second-highest quarterly total in the past nine quarters. Despite this significant increase, the 384.2 million total units recalled in the first half of 2024 (H1 2024) was lower than the 439.6 million units recalled in H1 2023. The H1 totals were also lower for total recalls, with 1,697 events in H1 2024 compared to 1,719 events in H1 2023.

Sedgwick's industry-leading Recall Index is a quarterly report that provides 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. The report features exclusive perspectives from Sedgwick's brand protection experts and network of strategic partners. The Index is a key resource in helping mitigate recall and litigation risk, as well as reputational damage caused by product crises and in-market events.

Product recall highlights from Q2 2024

The number of automotive recalls fell 7.3% in Q2 2024, from 262 in Q1 2024 to 243. Q2 marked the second-lowest quarter for units impacted in over 10 years, with 5.0 million vehicles recalled in Q2 2024.
Consumer product recalls fell 6.5% quarter-over-quarter, to 86 in Q2 2024. However, the industry was one of only two sectors that saw the number of units impacted increase in the second quarter. The number of defective units rose by 67.3%, from 23.4 million in Q1 to 39.1 million in Q2.
For the food and drink sector, the number of U.S. Food and Drug Administration (FDA) recalls fell 11.9%, from 134 in Q1 2024 to 118 in Q2. There were 114 unique companies involved in FDA food recalls this quarter. U.S. Department of Agriculture (USDA) recalls were down 53.8%, from 13 events in Q1 to 6 events in Q2. The second quarter tied with Q1 2020 for the lowest number of USDA recalls in a single quarter in the past 12 years.
The medical device industry was the only other sector where the number of defective units increased in Q2. There were 196.2 million defective units in Q2, a 267.3% increase from Q1 2024. In contrast, the number of recalls fell from 296 in Q1 to 242 in Q2.
Recalls in the pharmaceutical industry decreased from 112 in Q1 2024 to 93 in Q2. The number of defective units fell 51.2% to 4.5 million in Q2. There have been only seven other quarters in the past 19 years with fewer units recalled.

Looking ahead

Automotive: The Environmental Protection Agency (EPA) issued final rules to establish emission standards for the automotive industry in early Q2. However, after the Supreme Court struck down the Chevron Doctrine, the ability of agencies to take the lead in interpreting vague legislation could be severely impacted, making the future of final rules like the emissions standard uncertain. Electric vehicles (EVs) also remain a key focus for regulators. The National Highway Traffic Safety Administration called for stakeholder input on regulations for EV safety standards in Q2.
Consumer product: Strict scrutiny remains the theme of recent regulatory activity in the consumer product industry. The Federal Trade Commission (FTC) continues to pursue "Made in USA" violations, while the Department of Justice (DOJ) is seeking criminal charges against two executives who failed to comply with the Consumer Product Safety Act. Artificial intelligence (AI) and child safety will continue to top regulators' priority lists, driving new regulations and enforcement activities.
Food and beverage: The FDA received final approval on its proposed reorganization plan to create a unified Human Foods Program (HFP) in May. This will be a significant focus for the agency over the next several months. Food and drink companies can expect a learning curve as the agency adjusts to the new structure, but they should remain vigilant for any new guidance or agency communications around working with the new HFP.
Pharmaceutical: Regulators have been focused on marijuana, cannabis, and menthol cigarettes. Even as lawmakers work to reschedule marijuana to a Schedule III drug, they are denying a regulatory path forward for products derived from cannabis. The FDA is also under pressure from advocacy groups to ban menthol cigarettes.
Medical device: Enforcement activity is on the rise, with the DOJ announcing two major settlements concerning device manufacturers in the second quarter. Manufacturers should be aware that agencies are willing to pursue not only civil, but also criminal penalties for non-compliance with regulations. Meanwhile, the FTC challenged more than 300 patents listed in the FDA's Orange Book in a series of warning letters alleging the companies were trying to keep generic drugs off the market and impacting consumer prices.

"Even though recall data can fluctuate quarter-to-quarter, strict regulatory scrutiny has remained consistent across industries since 2020," said Chris Harvey, Senior Vice President of Brand Protection for Sedgwick. "Regulators are enforcing existing rules more stringently, while also working on or finalizing new rules that address emerging issues like AI. Companies will need to remain diligent in their preparation for recalls and in-market crises, as well as pay close attention to evolving regulations to ensure compliance."

To download the latest U.S. Recall Index report, click here.

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, visit www.sedgwick.com/brandprotection.

About Sedgwick
Sedgwick is a leading global provider of claims management, loss adjusting and technology-enabled 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 33,000 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 Claims Management Services, Inc.