Tylenol Legacy

Surging sales for safe seals

Tamper-resistant containers were hardly a burning issue for American industry before cyanide-spiked Tylenol capsules exposed the horrifying vulnerability of countless consumer products. Since then, however, packaging specialists have been swamped by a tidal wave of demand, and nearly 200 firms stand to reap heady gains from the crisis.

Analysts estimate that the scare will boost packaging sales by $1 billion during the next twelve months. Americans now spend about $52 billion a year on containers for every thing from toothpicks to turbines, but only about $15 billion of that goes for the cans, bottles, boxes and other consumer-goods packages that are ready targets for tampering.

The sudden concern for safety has been a shot in the arm for West Co. (1981 sales:

$177 million), a Philadelphia maker of tamper-resistant packaging and one of the few firms in the industry whose stock is publicly traded. The price of West shares jumped more than $3 in a single day, following reports of the Tylenol deaths, and the volume of trading exploded by more than 6,000%. West stock, which had been selling for around 16 be fore the poisonings, closed last week at 20 1/8. Says Robert Campbell, a spokesman for the company: "We've got queries about our products from across the board, not only from over-the-counter-drug packagers but from the food and cosmetic industry as well."

Other companies, large and small, report phenomenal new interest in their products. The packaging group of giant Anchor Hocking Corp. (1981 sales: $953 million) has been flooded with calls for its various lines of vacuum seals for glass food jars since the Tylenol tragedy. "Customers have even come down to the plant to speed up their orders," notes Senior Vice President Vincent Naimoli. PCM Corp. of Roslyn Heights, N.Y. (1981 sales: $10 million), anticipates a boom. Says Executive Vice President Bob Baraker: "We expect our business to go up by half or even double in the year ahead, and that is based just on the queries we've had in the past three weeks." The company makes "blister packs": plastic sheets that encase each capsule in a container within its own bubble. Tiny Pillar Corp. of Milwaukee (1981 sales: $2 million) is awash in stacks of new orders for its sealing machinery. Says President Ernest Goggio: "People want to buy right now. They don't want to fool around."

The Tylenol nightmare has managed to drive consumer-products makers and the Food and Drug Administration into a hasty alliance. Although companies have long accused the FDA of issuing meddlesome regulations, they are now anxiously seeking national packaging guidelines out of fear of a patchwork of new state and local requirements. The Proprietary Association, a trade group that represents manufacturers and distributors of 90% of over-the-counter Pharmaceuticals, has gone so far as to recommend rules that would cover all preparations that can be "ingested, inhaled, injected or inserted in the human body, or applied for ophthalmic use." Cook County, which includes Chicago, has already enacted a law requiring seals over the caps of all nonprescription medicine containers, and the Massachusetts house of representatives is holding hearings on a similar measure. The FDA now plans to issue its guidelines in about a week and is likely to give the makers of capsules and other products that are especially vulnerable to tampering up to 90 days to comply.

Experts consider the safest packages to be those equipped with seals or other devices that users must break to gain access to the product. Predicts Ben Miyares, executive editor of Food and Drug Packaging magazine: "Packages designed to show evidence of tampering will be the wave of the future." The management-consulting firm of Arthur D. Little, which has been studying the problem, advocates the wider application of several safety methods now used on some grocery products. They include the tight plastic bands or shrink wraps that cover the cap and neck of some syrup and sauce bottles, vacuum seals like those on instant-coffee jars, and baby-food "pop tops" that bulge visibly once opened. The single most effective form of protection for drugs, according to the Little research, would be blister packages like those currently used for SmithKline's cold medicine Contac.

The vigorous drive for packaging safety will push retail prices up, but some consumers will not mind paying for peace of mind. Says Arthur Stupay, a leading analyst with the securities firm of Prescott, Ball & Turben: "Better closures would raise final prices by no more than 1% or 2%." Still, packaging-industry insiders readily admit the obvious: safeguards will never be foolproof, regardless of their cost.

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