Magazine article Risk Management

Smell No Evil

Magazine article Risk Management

Smell No Evil

Article excerpt

The makers of the popular Zicam line of homeopathic cold remedies were forced to pull their nasal sprays and gel swabs from store shelves in June after the Food and Drug Administration (FDA) warned that using the products could result in the permanent loss of the sense of smell.

The FDA took action after receiving more than 130 reports from consumers who had lost their senses of smell-a condition called anosmia--after using the products. Zicam's manufacturer Matrixx Initiatives, Inc. had also received more than 800 similar reports. (Matrixx was not required to share this information with the FDA, however, since Zicam is considered a homeopathic product and therefore not subject to FDA regulation.) According to researchers, the zinc contained in the products may be responsible for damaging the nerves in the nose that are responsible for smell.

While Matrixx insisted that its products were safe, the recall may prove devastating for the company. According to analysts, the products in question account for 40% of the company's $110 million in annual sales. Acting President and COO William Hemelt anticipated that the recall would cost at least $10 million, drive up product liability costs and open the door to potential litigation.

In addition, the FDA will now require Matrixx to formally seek its approval before bringing the products back to market--a process that may cost the company more time and money than it is willing or able to spend.

Hemelt also feared the impact that the news would have on the sales of its other products, including Zicam oral cold remedies, which were not under FDA scrutiny. …

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