U.S. product recalls hit four-year high in first quarter of 2023

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May 25, 2023, 13:00 ET

Sedgwick brand protection releases Q1 U.S. product recall index report

MEMPHIS, Tenn., May 25, 2023 /PRNewswire/ -- Data from the first quarter of 2023 shows that the number of product recalls in the U.S. increased 14.2% from the previous quarter. According to Sedgwick brand protection's latest U.S. product recall index report — which analyzes recall data from five key industries — this marks the highest single-quarter total in four years.

After a second consecutive record-breaking year for the number of units recalled in 2022, stakeholders have been watching closely to see whether that trend would continue into 2023. However, data from the first quarter of 2023 reveals that the number of recalled units fell 21.6% from the previous quarter and lags far behind the number that had been recalled by this time in 2022. With three quarters in the year yet to be reported and regulatory and consumer scrutiny continuing to increase, there is still the possibility of a third consecutive year with over 1 billion recalled units.

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 beverage, medical device, and pharmaceutical industries. Featuring unrivaled analysis and perspective from Sedgwick's brand protection experts and network of strategic partners, the index is a key aid in helping mitigate recall risk, litigation, and reputational damage caused by product crises and in-market events.

Highlights from Q1 2023 product recall data

Automotive recalls increased 3.4% to 245 events. Electrical systems were the leading cause with 48 events, followed by equipment with 46, and airbags with 17.
The consumer product industry recorded the most recalls in a single quarter since Q3 2015, with 94 events. The number of units recalled also increased significantly from the previous quarter, up 442.1% to 23.1 million units. Only one quarter in the last five years saw more units recalled.
While U.S. Food and Drug Administration (FDA) recalls increased 23.2% from the previous quarter to 117 events, the number of units impacted decreased 78.7% to 39.3 million. In contrast, the number of U.S. Department of Agriculture (USDA) recalls held steady at 11 events for the second consecutive quarter, even as the number of pounds recalled increased 1,129% to 2.9 million.
The number of medical device recalls increased 4.6% to 252 events. While manufacturing defects accounted for the greatest proportion of these (with 59), quality concerns were the leading cause in terms of units impacted, with 68.5 million or 82.3% of all recalled devices.
Q1 2023 marked the most pharmaceutical recalls in a single quarter in the past 18 years, with 144 events. The number of units impacted increased 1,071.8% to 49.5 million after an unusually low number of units were recalled in Q4 2022.

Projections for the remainder of 2023

As we progress further into 2023, technology advancements and increased adoption of electric vehicles (EVs) will push regulators to move quickly to ensure that vehicles equipped with the latest features are safe for the road. Following in the footsteps of the European Union, we may also see a continued push from the Biden administration, regulators, and other legislators to adopt new standards for low to zero emissions vehicles. Manufacturers should be prepared for a slate of new regulations and guidance as regulators work to ensure vehicle safety.
The U.S. consumer product industry will see strict regulatory enforcement continue from both the Consumer Product Safety Commission (CPSC) and the Federal Trade Commission (FTC). The CPSC will likely continue its more public efforts to pursue remedies from manufacturers and its practice of issuing civil penalties. Manufacturers will want to update their recall and communications plans to align with CPSC's new, more aggressive enforcement strategy.
The FDA has outlined an ambitious list of topics it will tackle in 2023 with draft or final guidance, including allergens, dietary supplements, food additives, topics related to the Food Safety Modernization Act (FSMA), and labeling. The infant formula industry is also on notice from the FDA, which issued a constituent update and sent a letter to stakeholders encouraging them to quickly improve their processes and implement the programs it outlined.
For the medical device industry, the FDA is focused on improving the supply chain and preventing shortages with a higher allocation for related programs in its draft budget for FY2024. The FDA is also testing two pilot programs that implement digital solutions for new product submissions and enhancing stakeholder communications. As we continue through the year, cybersecurity and protecting patients from cyber threats and their consequences will be top of mind for the FDA and device manufacturers.
With the COVID-19 public health emergency now officially ended, pharmaceutical companies will need to be mindful of changes in drug distribution, clinical trials, and oversight that were granted during the pandemic. Cannabis and tobacco products will be another main focus for the FDA, which has begun research on the medical uses of cannabidiol and proposed tighter regulations around the manufacture of tobacco products.

"As the number of recall events increase across industries, the risks to manufacturers grow more serious, with increased regulatory enforcement and a more publicized recall process," said Chris Harvey, Sedgwick senior vice president of brand protection. "Regulators are working to prioritize product safety while balancing innovation with oversight — meaning manufacturers can expect to contend with new rules and regulations. Businesses will need to remain agile to keep pace with these changes and prepare for future ones."

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 stakeholders navigate the regulatory environment, product recalls, and other in-market challenges. For more information, see sedgwick.com/brandprotection.

To download the latest recall index report, visit Sedgwick's 2023 edition 1 recall index site.

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.

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