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RECALL INDEX 2016Q1

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Recall Index, Q1 2016

Fines in Q1 2016 have already reached 82% of all fines in 2015.

Consumer Products FUELING A RECALL RISE

The consumer product industry saw a spike in units recalled, making it the highest number since 2004 and the second highest since 1997. The number of recalls also rose slightly over the previous quarter.

CONNECTING THE DOTS

1. Q1 saw the continuation of a recent trend in rising fines, something the CPSC chairman has promised to pursue.

2. Reported consumer injuries were more than ten times higher in the first quarter of 2016 than Q1 2015.

3. The propane gas recall brought miscellaneous products to the top category based on units, followed by home fixtures, home communication, and entertainment.

TOP HAZARDS BASED ON UNITS

150MM

120MM

90MM

60MM

30MM

Q12014

Q22014

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

CONSUMER RECALLS & UNITS

100

80

60

40

20

REPORTED CONSUMER INJURIES

83.8%Fire

9.9%Falling

1.9%Overheating

1.5%Structural Collapse

21Q12015

225Q12016

FINES ISSUED BY CPSC

118MMgallons of under-odorized propane gas were recalled due to a fire hazard, the highest number of units in a single recall since 2004. 2015 Total Q1 2016

$18.8MM$15.4MM

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Automotive EQUIPMENT RECALLS INFLATE

NHTSA recalls are down 27% in Q1, while recalled units are up 122%. This represents the third most recalled units in a single quarter.

CONNECTING THE DOTS

1. Due largely to airbag recalls, recalled equipment units have increased to the second highest level in the past four years.

2. The second and third most recalled auto units were seat belts for potential damage during collision and hood locks for failure to latch.

3. Five companies accounted for 72% of recalled VINs.

NHTSA RECALL PRODUCT TYPE BY UNIT PERCENTAGE

5MM airbag units were recalled by an additional airbag supplier, impacting multiple manufacturers.

AUTO RECALL CATEGORIES BASED ON VINS

30025020015010050

60MM50MM40MM30MM20MM10MM

Q12014

Q22014

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

NHTSA RECALLS & UNITS

0.7%Child Seat

51.6%Equipment

47.5%Automobile

0.2%Tire

TOP CAUSES FOR AUTO RECALLS BY QUARTERQ2

2014

Airbags

Q42014

Airbags

Q12015

Airbags

Q22015

Airbags

Q32015

Airbags

Q12016

Airbags

Q32014

ElectricalSystem

Q42015

Visibility

Latches/Locks/Linkages

Seat Belts

Service Brakes, Hydraulic

Other

58.0%Airbags

12.8%

9.8%6.1%

13.3%



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Pharmaceuticals MISLABELING MISHAPS

While the number of recalls issued in Q1 2016 remained consistent with the historical average, the number of units affected dropped substantially – to the second lowest quarter in the last decade.

CONNECTING THE DOTS

1. More than half of recalled units were Class III – a change from recent years, when more hazardous Class II recalls were typically the highest percentage.

2. The average recall size in Q1 was 55,000 units, which is a major decline from the historical average of 150,000.

3. In a continued downward trend, only five companies experienced more than one recall in Q1 2016.

OF PHARMACEUTICAL RECALLS WERE NATIONWIDE

53% of recalled units were due to mislabeling.

AVERAGE NUMBER OF UNITS PER RECALL

100

75

50

25

60MM

45MM

30MM

15MM

Q12014

Q22014

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

PHARMACEUTICAL RECALLS & UNITS

77%

OF ALL Q1 2016 UNITS WERE THE RESULT OF A SINGLE RECALL43.6%

THIS RECALL TOTALED 1.4MM UNITS DUE TO MISLABELING

Q1 2016

55,169

2015

177,070

2014 345,291



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Medical Device MECHANICAL MALFUNCTION

Both recalled units and number of recalls declined in Q1 2016 to the lowest level since 2013. In fact, these measures dropped roughly 30% from the quarterly average over the last two years.

CONNECTING THE DOTS

1. Less risky Class II situations made up 98% of recalls, but still declined from the 2015 quarterly average.

2. In Q1, no med device company experienced more than ten recalls – a decline from the historical trend of 20 or more in a quarter.

3. The two largest recalls made up more than half of the total recalled units, both due to machine failure.

3/4of the largest recalls reported in Q1 were due to machine failure, making it the top cause of recalled units.

350

280

210

140

70

100MM

80MM

60MM

40MM

20MM

Q12014

Q22014

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

MED DEVICE RECALLS & UNITS

TOP MED DEVICE RECALL CAUSES BASED ON UNITS

CLASS II UNITS RECALLED BY QUARTER

OF MED DEVICE RECALLS WERE NATIONWIDE

58%

62.6%MachineFailure

10.2%Quality

Issue

9.9%Sterility

Issue

7.1%Calibration

Error

3.9%Software

Q1 2016

9.6MM

Q4 2015

47.1MM

Q3 2015 69.6MM



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Pork

Food & Beverage RECIPE FOR CONCERN

After major food recalls in 2015, including the cumin spice recall that had a ripple effect across the industry, both the number of recalls and the number of reported units affected dropped substantially in Q1.

CONNECTING THE DOTS

1. Foreign materials became the top cause for FDA food unit recalls in Q1. In 2015, the leading cause was undeclared allergens.

2. The same categories continue to experience the greatest impact from recalls: prepared foods, baked goods, and fruits and vegetables.

3. Beef was the top recalled USDA product, making up nearly 68% of total pounds recalled in Q1.

IMPACT OF A SINGLE PRODUCE RECALL

Due to a 6 month listeria outbreak

49% of FDA food units were recalled due to foreign materials, including glass, metal, and plastic.

200 50.0MM

150 37.5MM

100 25.0MM

50 12.5MM

Q12014

Q22014

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

24StatesAffected

6BrandsAffected

19ReportedIllnesses

TOP USDA CATEGORIES BASED ON POUNDS

67.6%

28.6%

3.8%

Beef

Chicken

TOP FDA FOOD

CATEGORY BASED ON

UNITS

27.5%Prepared

Foods

25.2%BakedGoods

13.1%Vegetables

12.1%Beverages

FDA FOOD RECALLS & UNITS


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A Class I recall, according to the FDA, is a situation in which there is a reasonable probability that the product will cause serious adverse health consequences or death. A Class II recall is a situation in which the product could cause temporary or medically reversible adverse health consequences or where the probability of serious adverse health conse-quences is remote. The FDA defines a Class III recall as a situation in which the product is not likely to cause adverse health consequences.

Stericycle ExpertSOLUTIONS & the Recall Index Explained

Stericycle ExpertSOLUTIONS helps partners minimize risk to the public and to their company brand by executing and planning for product recalls efficiently, effectively, and compliantly. Each quarter, we analyze cumulative recall data across six product categories. This helps our partners navigate the regulatory environment and identify trends.

How the Stericycle Recall Index is Compiled

The Stericycle Recall Index gathers and tracks cumulative data from the four primary federal agencies that oversee recalls in the United States: the Consumer Product Safety Commission (CPSC), the Food and Drug Administration (FDA), the Food Safety and Inspection Service (FSIS) of the United States Department of Agriculture (USDA), and the National Highway Traffic Safety Administration (NHTSA).

FDA Data

To track trends in food, pharmaceutical, and medical device recalls, the Stericycle Recall Index uses information publicly available in news releases posted on the FDA website. For additional insight into recalls governed by the FDA, Stericycle collects and analyzes data from the agency’s weekly enforcement reports, which provide additional details including recall class, quantity of units affected, and number of reported incidents.

CPSC Data

For further insight into consumer product recall trends, Stericycle analyzes data from CPSC recall announcements. When compiling statistics and analyzing trends for consumer product recalls, the Stericycle Recall Index uses standard product categories and hazards recognized by the CPSC.

USDA Data

For additional insight into food recall trends involving meat, poultry, and egg products, the Stericycle Recall Index collects and analyzes data from recall announcements posted on the USDA’s FSIS website. Statistics and trends are compiled using standard product categories, classifications, and reasons for recalls as recognized by the USDA.

NHTSA Data

To understand trends in the automotive industry, the Stericycle Recall Index analyzes data from NHTSA reports on recalls of autos, child seats, equipment, and tires.

Terminology

Announced recalls represent those recalls documented in news releases published on agency websites. Enforced recalls refer to those recalls documented in weekly FDA enforcement reports that are summarized based on the FDA assigned Event ID. Their documentation can lag behind announced recalls by weeks or even months because the recall process may take time to complete.


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