J&J cleaves McNeil from consumer in move to restore OTC brands

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Johnson & Johnson is reorganizing its troubled McNeil Consumer Healthcare unit in the US and installing new leadership. The moves are an effort to fix problems that have plagued the unit and led to recalls of Tylenol and other OTC products the last 18 months, damaging the brands' once storied image.

Effective April 4, the McNeil division will become a standalone organization. A statement issued by the company noted that McNeil will reside in a new Global Franchise Organization and is to be split up by geography and product type, with the moves designed “to give focused attention to quality and compliance, and the critical task of restoring McNeil Consumer Healthcare brands.”

It means that the maker of Benadryl, Motrin and Zyrtec will soon be separated from the wider group of J&J consumer healthcare businesses selling everything from Listerine to Visine, explained The Wall Street Journal, which broke the news of the revamp after reviewing a message sent to employees by Jesse Wu, the J&J executive who manages all of its consumer businesses.

Pat Mutchler, a J&J veteran, will lead the reorganized business. Current managers of J&J's OTC businesses worldwide and McNeil Consumer Healthcare have been reassigned, the WSJ noted.

The new McNeil will be composed of four consumer categories: skin care—baby and adult; OTC; oral care and topical health; and women's and intimate health. Regionally, divisions in Asia-Pacific, Europe/Middle East/Africa, Latin America, and North America will market the products and each has its own chairman or VP.

J&J said the regional and franchise structure “will enable quicker reaction to changing market conditions and more efficient execution of region-wide initiatives.”

The moves follow numerous recalls that lowered sales by $900 million last year and resulted in multiple congressional hearings. Earlier this month, the McNeil unit reached a consent decree with the FDA that put three manufacturing sites under regulatory supervision to ensure correction of deficiencies. And J&J CEO William Weldon initiated a larger manufacturing reorganization and review of operations that has led to further recalls including in some of the healthcare products giant's device divisions.
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