High Price Device: Race to Innovate Medical Devices Fuels More Product Recalls

PR Newswire — February 7, 2017

INDIANAPOLIS, Feb. 7, 2017 /PRNewswire/ — The rapid pace of innovation in
medical devices resulted in an unfortunate side effect of increasing medical
device recalls in the second half of 2016, according to the July-Dec. 2016
Recall Industry Spotlight report released today by Stericycle ExpertSOLUTIONS
(NASDAQ: SRCL).

The biannual Industry Spotlight, which examines trends in a specific industry,
found that medical device recalls heated up quickly as the year progressed,
increasing 44 percent from the first half of the year. There were more than 650
medical device recalls in Q3 and Q4 2016, the second highest since at least
2000. More than 180 million products were recalled in total, making it the third
highest half year on record since 2000 as well.

“Medical devices are saving lives and improving the quality of life for millions
of patients. But as medical technology advances and becomes more complex, these
innovations can be more prone to defects, and therefore, more vulnerable to
recalls,” said Michael Good, Vice President of Commercial & Client Services,
Stericycle ExpertSOLUTIONS.

While the top causes of recalls fluctuated quarter to quarter, a clear pattern
emerged: software problems drove the highest number of recalls across the two
quarters, with product mislabeling a close second. When examining the number of
units affected, quality issues were the leading cause followed by mislabeling,
parts problems, and sterility concerns.

“The challenge for medical device companies is that, unlike other industries,
there is no single dominant cause of recalls they can focus on improving,” Good
added. “Defects and quality problems were all over the map, from misalignment to
unbalanced pH levels to improper product transportation.”

The safety of lithium-ion batteries in medical devices was a noteworthy contrast
to other industries, the report found. Unlike the battery’s fire hazard problems
plaguing consumer products like hoverboards, lithium-ion battery problems have
not been as prominent in medical devices.

A likely reason for the disparity is quality control. Consumer electronics are
one of the most counterfeited product types in the U.S., making them far more
likely to include subpar batteries that put the public at risk. Consumer
products also tend to suffer much greater wear and tear. Medical devices have
not yet experienced these kinds of threats at the same level. The Industry
Spotlight report does, however, caution manufacturers that lithium-ion battery
problems could become more commonplace in medical devices as their use
increases. Manufacturers would be wise to start making contingency plans for
potential recalls since the batteries have specialized transportation,
permitting, and destruction requirements.

Q4 2016 Recall Index Key Trends
The company also issued its Q4 2016 Recall Index, which reports quarterly on
recalls in the food, pharmaceutical, automotive, medical device, and consumer
product industries. The Index revealed both positive and negative trends in
recalls across industries in the last quarter of 2016.

On the positive side, consumer product recalls fell by 21 percent over the
previous quarter, making it the lowest quarter of the year. Automotive-related
recalls fared better as well. While recalls increased just slightly (3 percent),
the overall number of recalled units dropped a significant 57 percent to nearly
5.3 million – the lowest quarter since Q1 2013.

Recalls in the pharmaceutical and food industries unfortunately trended upward
in Q4. Pharmaceutical recalls jumped 28 percent to 83, the highest level since
Q3 2014. There was a 12 percent hike in Food and Drug Administration (FDA) food
and beverage recalls in Q4, marking the highest quarter since at least Q1 2010.

“We’ve witnessed recall activity fluctuate across industries in recent quarters,
and companies never know when their product will be next,” said Good. “It is
crucial for businesses of all types and sizes to update their recall plans and
prepare in advance to avoid potential consequences with both regulators and
customers.”

Both the full July-Dec. 2016 Industry Spotlight on medical device recalls and
the Q4 2016 Recall Index are available for download
http://www.stericycleexpertsolutions.com/thought-leadership/.

About the Stericycle Recall Index
The Stericycle Recall Index is the only report that aggregates and tracks recall
data to help manufacturers and other industry stakeholders navigate the
regulatory environment and identify trends. Each quarter Stericycle analyzes
data from the U.S. Consumer Product Safety Commission (CPSC), the National
Highway Traffic Safety Administration (NHTSA), the FDA and the U.S. Department
of Agriculture (USDA). For more information, please visit
www.stericycleexpertsolutions.com/thought-leadership.

About Stericycle ExpertSOLUTIONS(TM)
Stericycle Inc. is a NASDAQ-listed global business-to-business services company
which provides highly specialized solutions to healthcare and commercial
businesses of all sizes. Founded in 1989, Stericycle Inc. has grown to become a
leader across a range of complex and highly regulated market sectors and
operates in 550 locations. Stericycle ExpertSOLUTIONS(TM) is the industry leader
in managing automotive, consumer product, pharmaceutical, medical device,
juvenile product, and food and beverage recalls. ExpertSOLUTIONS streamlines the
entire product recall process and manages Notification & Response, Processing &
Tracking, and Compliance & Reporting for leading global companies. For more
information, visit www.stericycleexpertsolutions.com.

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SOURCE Stericycle ExpertSOLUTIONS

Subject Codes: PC/t.170207090008842, PT/lang.en, PC/ticker, IN/MEQ,
IN/HEA, SU/SVY, RE/Indiana, PC/priority.r, PC/category.f,
PC/DataFeat_indpr, PC/DataFeat_natl3, PC/port_32,
PC/class.1245, PC/WAVO_….h., PC/APT_….h, PC/trade_h,
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PC/APT_..b.., PC/circuit_b, PC/wavo3_b, PC/Billing_RWB,
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PC/bureau_NE, PC/port_01, PC/port_96, PC/port_31,
PC/port_19, PC/port_91, PC/contact, PC/website,
PC/id_NE05881

Company Codes: NASDAQ-NMS:SRCL

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