Quick Summary of the Chicago Tylenol Murders

In 1982 seven people were killed over a period of a few days when they took Tylenol capsules that were laced with the deadly poison cyanide. The killer removed bottles of Tylenol from retail store shelves, filled the capsules with cyanide, and returned them to the store shelves to be purchased in regular course by unsuspecting, random victims. Soon after it was determined that poisoned Tylenol was the cause of the deaths, the manufacturer, McNeill (owned by Johnson & Johnson), issued mass warnings and recalled all 31 million bottles of Tylenol in circulation. To this day, no suspect for these murders has been identified.

The Janus Family

The first victim of the poisoned Tylenol was 12-year old Mary Kellerman who was given a Tylenol by her parents when she woke up with a sore throat on September 29, 1982. She died within a few hours. The second victim was Adam Janus who died later that day. It was initially thought that he had a heart attack — that he was a victim of poisoning was only uncovered later. His brother and sister-in-law, Stanley and Theresa Janus, went to Adam’s home soon after learning of his death to commiserate with other family members and friends. While at Adam’s house, Stanley and Theresa both developed headaches and took Tylenol they found in the house within a few minutes of each other. The Tylenol was from the tainted bottle. Both Stanley and Theresa collapsed and began convulsing soon after ingesting the pills and were rushed to the hospital. Stanley was declared dead a few hours later, while Theresa wasn’t declared dead for two days.

The Simultaneous Death Lawsuit

The deaths of Theresa and Stanley Janus resulted in a notable lawsuit. Stanley had a life insurance policy that paid to Theresa or her estate if she survived him, but would go to a contingent beneficiary, Stanley’s mother, if Theresa predeceased Stanley or if they died simultaneously. Because Theresa was declared dead two days after Stanley, the death benefit was paid to Theresa’s estate. Stanley’s mother sued the life insurance company claiming that even though Stanley was declared dead two days prior to Theresa, they actually were both brain dead when they arrived at the hospital and that brain death determined when someone was dead regardless of them being kept alive with artificial respiration.

The court, based on quite a bit of testimony of medical personnel and analysis of the law concerning when death legally occurs, ruled that Theresa died after Stanley. Consequently, the insurance proceeds should be paid to the beneficiaries of her estate. The case is commonly taught in law school illustrating the perils of simultaneous death and the importance of dealing with simultaneous death in estate planning documents. The opinion of the court delves deep into the details of the gruesome deaths of Stanley and Theresa and the medical attempts to save their lives. Here’s a link if you want to read it: Janus v. Tarasewicz. It’s fascinating and horrible — reading it during law school really made an impression on me.

What We Can Learn From Johnson & Johnson’s Response to the Tylenol Murders

Tylenol was an incredibly important product to Johnson & Johnson:

Before the crisis, Tylenol was the most successful over-the-counter product in the United States with over one hundred million users. Tylenol was responsible for 19 percent of Johnson & Johnson’s corporate profits during the first 3 quarters of 1982. Tylenol accounted for 13 percent of Johnson & Johnson’s year-to-year sales growth and 33 percent of the company’s year-to-year profit growth. Tylenol was the absolute leader in the painkiller field accounting for a 37 percent market share, outselling the next four leading painkillers combined, including Anacin, Bayer, Bufferin, and Excedrin. Had Tylenol been a corporate entity unto itself, profits would have placed it in the top half of the Fortune 500.

Source.

A primary reason Tylenol was so dominant was due to acetaminophen being under patent and thus not competing with generics. The patent for acetaminophen expired in 1984.

Johnson & Johnson’s response after discovering the poisoning is now considered the gold standard for how to respond to a crisis. The company responded quickly and with transparency. J&J immediately recalled all 31 million bottles in circulation and offered refunds even for partially used bottles. Their overriding concern was to prevent future deaths and protect the public. “Johnson & Johnson chairman, James Burke, reacted to the negative media coverage by forming a seven-member strategy team. The team’s strategy guidance from Burke was first, ‘How do we protect the people?’ and second ‘How do we save this product?'” Source. The way they responded actually buoyed trust in J&J and the Tylenol brand recovered and returned to its #1 rank as a pain reliever within a year! Business school cases are taught about J&J’s decision-making during the crisis.

In the aftermath of the poisoning, J&J spearheaded new safety features which are now common on all drug packaging and make tampering difficult:

Working with FDA officials, they introduced a new tamper-proof packaging, which included foil seals and other features that made it obvious to a consumer if foul play had transpired. These packaging protections soon became the industry standard for all over-the-counter medications. The company also introduced price reductions and a new version of their pills — called the “caplet” — a tablet coated with slick, easy-to-swallow gelatin but far harder to tamper with than the older capsules which could be easily opened, laced with a contaminant, and then placed back in the older non-tamper-proof bottle.

Source: NPR

It is amazing that Johnson & Johnson emerged from this tragedy in such good shape. Some key takeaways:

• When there is a problem, act quickly. Denial is not a good strategy. Attempts to cover-up or downplay the poisonings would have probably sunk the brand Tylenol and damaged J&J.
• Put your customers first. Especially when it comes to their health and safety.
• Act with transparency. In the days and weeks after the incidents J&J held press conferences and used paid advertising to communicate with the public extensively about what they were doing to fix the problem. The chairman of J&J went on 60 Minutes and national talk shows to discuss the poisonings and J&J’s response. This helped J&J keep the public’s trust.
• Even though the Tylenol murders were basically an act of terrorism, J&J took responsibility and then worked to change the industry so that such a thing couldn’t happen again. Taking responsibility for your products/services is a key aspect to building and maintaining trust with customers.