Wednesday, January 16, 2008

Thirst for outsourcing fuelling product recalls


Product recalls in the UK due to health and safety concerns have shot up to their highest level, with the rise in outsourcing to China fingerpointed for much of the blame.
In the past year, sourcing products from a "poorly controlled" Chinese manufacturing and supply chain has proved to have a "sting in its tail", according to London-based law firm Reynolds Porter Chamberlain (RPC) who recently released their annual report on the issue.

The situation is concerning, especially considering that in the past year the majority of top tier pharma firms have pledged their resolve to increase outsourcing to Asia.

In 2007, 192 product lines were recalled in th UK - a jump of 22 per cent over the 179 withdrawn in 2006. The firm's historical data reveals a clear upward trend, with 165 products recalled in 2005 and 143 the year prior to that.

The figures refer to, but are not specific to, pharmaceutical products, among other products ranging from food and drink to personal care products and toys.

Last year China admitted that almost a fifth of products - including fake human blood protein - made for domestic consumption were substandard and naturally some of the problem is filtering through to products for export. The British Commissioner of the European Union for Trade, Peter Mandelson, has said that around half the counterfeit goods found in the EU originate in China.

"We have been warning for years of the risks in uncontrolled outsourcing to China and other developing countries," said Mark Kendall, Partner, of RPC.

Many companies need the cost savings from outsourcing to China to drive their earnings but the statistics show that putting in place proper quality control procedures to protect their customers is easier said than done".

In July last year, the largest counterfeit drugs conspiracy ever to be encountered in the UK was exposed following Operation Stormgrand, an investigation stretching back several years and culminating in the seizure of over £1.5m (€2.2m) of fake medicines.

The men under investigation were part of the UK distribution arm of a global counterfeiting ring, with operations stretching from China, India and Pakistan to the Caribbean, the US and the UK.