Cardinal Health recently announced that it would recall over nine million surgical gowns due to issues with possible contamination. The recall is expected to be a costly one for the company. Cardinal Health recently informed its shareholders that it would be taking a $96 million charge against its earnings in the second quarter of 2020. This includes all costs that are related to the recall. At the current time, Cardinal Health is not aware of any patient safety issues or injuries that have been caused by the gowns so it is unclear whether the company will be facing any lawsuits related to the recall.
On January 11, 2020, Cardinal Health announced that it was recalling the surgical gowns. The recall affected Level 3 surgical gowns and PreSource procedural packs that contain these gowns. Hospitals were told to stop using these particular gowns.
The surgical gowns were classified as Level 3 because they provide moderate risk protection. These gowns are used in procedures such as open heart surgery and are worn by surgeons and other healthcare professionals. They are intended to protect the patient from microorganisms and other particles.
Possible Contamination of the Surgical Gowns Due to an Unapproved Manufacturing Location
The issue with these surgical gowns involved a potential contamination. The specific problem was that Cardinal Health contracted out the manufacture of these gowns to another company. The contractor was supposed to only make the gowns in an approved location in order for the safety of the product to be assured. However, the manufacturer did not follow the proper protocol and requirements for making these gowns. It made the gowns in a location that was not approved by the Food and Drug Administration, which is tasked with regulating the products. These locations were below required environmental standards, exposing the gowns to possible contamination.
The contractor that Cardinal Health was using was based in China. Without seeking approval from the company, the contractor shifted the location where it produced some of the surgical gowns. This was not the first issue that Cardinal Health had experienced with the particular contractor. The company had already been discovered producing gowns in an unregistered location back in 2018. At the time, Cardinal Health did not take any action and did not coordinate its response with the FDA since it did not believe it to be necessary. Cardinal Health continued to work with the particular contractor.
Here, the press release did not reveal exactly how Cardinal Health learned that this contractor had shifted production once again to an unapproved location. However, Cardinal Health took almost immediate action this time to report the incident and undertake a voluntary recall of the products. The FDA has agreed with the need for a voluntary recall due to concerns about possible contamination. The company immediately terminated its relationship with the contractor. However, there are still numerous problems resulting from the lapse that must be addressed.
The Recall Was Voluntary and There Have Been No Reported Injuries
At present, there is no evidence that these specific gowns are actually tainted. The recall was initiated due to possible contamination at the location where they were made. This has not yet become a product liability issue as there are no injuries to date. However, the company is monitoring the situation and anyone who has developed an infection after a surgery in which a Cardinal Health surgical gown was used should speak with an attorney about their legal rights.
For Cardinal Health, the costs of this recall have already been considerable as the company has had to pull millions of units off of the market. It has also had to replace all of the recalled units at its own cost. This includes some procedural packs that were manufactured as far back as 2018. Cardinal Health informed shareholders that it expects these costs to approach $100 million. This includes both costs from the gowns that must be discarded as well as money the company will need to spend to ramp up production in order to meet shortages. This number is based on an initial estimate that the company made right when the news was released and the costs can escalate beyond that if Cardinal Health experiences any issues in replacing the lost supply.
A Nationwide Gown Shortage Threatens Elective Surgeries
Unfortunately, the impact on the health care system goes far beyond the amount that Cardinal Health’s balance sheet has suffered. When a major medical product like this has been recalled, there are numerous other consequences. Specifically, patient care can be disrupted as there is the possibility that any hiccup in the medical product supply chain can cause postponement of elective surgeries. Hospitals need to scramble to find alternate sources of product while the company is figuring out how to resupply the market in the wake of the recall. The FDA has been working to help address the supply shortage, including helping hospitals locate a supple of alternate gowns if necessary.
There have already been media reports of surgeries that have needed to be cancelled due to a nationwide surgical gown shortage. Numerous patients have been reported to have had difficulty receiving treatment because of the shortage. There was one media report of a man with pancreatic cancer who was told that his surgery would have to wait two weeks due to a lack of surgical gowns. Fortunately for that patient, pressure from the family persuaded the hospital to find a way to get the surgery done quicker.
In the meantime, Cardinal Health has been taking steps to make sure that its customers are supplied. One of the measures that the company has taken is to provide customers with a Level 4 gown that provides an even higher level of protection at its own cost. The company has also spent money to step up its own production of equivalent products so it can manufacture them on an expedited basis. Still, the shortage of surgical gowns is an ongoing issue due to the supply that must be replaced.
If you or a loved one was adversely affected by the contamination of Cardinal Health surgical gowns, contact The Law Offices of Sadaka Associates today for a complementary evaluation of your case.