Johnson & Johnson's (NYSE: JNJ) McNeil Consumer Health care unit is getting a baby sitter. Literally. The company reportedly announced that the unit will be headed up by Patrick Mutchler, previously the head of the health-care giant's baby products.
Let's just hope there are No More Tears for investors.
As part of the reorganization, the U.S. over-the-counter medications that have been part of a string of recalls will be pulled out into its own separate unit. Presumably the separation will give help give the unit a little more oversight.
It certainly can't hurt. The Associated Press says there's been around 20 recalls of over-the-counter medications such as Tylenol, Motrin, and Benadryl. I lost track somewhere around when they went into the double digits.
The biggest challenge won't be ending the quality problems that have festered at McNeil. Throw enough money at the problem, hire enough quality assurance workers, and the problem will go away. Avoiding fines set out in the consent decree it has with the Food and Drug Administration should be a little added motivation.
The biggest issue will be getting consumers to trust the Johnson & Johnson brand again. Most of its over-the-counter drugs have alternatives from consumer health divisions at other pharmas -- GlaxoSmithKline (NYSE: GSK), Merck (NYSE: MRK), Pfizer (NYSE: PFE), and the like. Plus drugs like Tylenol aren't under patent anymore. If the Tylenol brand doesn't mean quality, consumers might as well go for the cheaper generic from Perrigo (Nasdaq: PRGO).
Perhaps hiring a used car salesman would have been a better move. It may need to offer some slick deals to get this thing turned around.
Rising star Anand Chokkavelu decided the risks were worth the rewards and bought Johnson & Johnson for his portfolio.
