The Tylenol Mafia (34 page)

On Monday, February 10
^th
, the FDA had released some of the findings from its analysis of the cyanide from Elsroth’s Tylenol bottle. They did so without refuting Hyland’s contention that the cyanide would eat through Tylenol capsules in “8 to 10 days. Four days later, the FDA completed a chemical analysis of the cyanide from the second bottle of adulterated capsules. Again, the FDA did not dispute the assertions of Hyland and J&J spokespersons regarding the super-corrosiveness of cyanide. The well-publicized official line was that the cyanide would eat through the gel-based shells of the Tylenol capsules in 8 to 10 days.

Through all of this, Carl Vergari knew the official line was a lie. On February 15
^th
, the FDA finally admitted that Vergari was right; the cyanide would not eat though Tylenol capsules in 8 to 10 days. In fact, the cyanide-laced capsules could last for many months without showing signs of corrosion. This astonishing admission came straight from FDA Commissioner Frank Young - but not until five days after the FDA had completed the analysis of the cyanide-laced capsules from Elsroth’s Tylenol bottle.

A chemical analysis of the potassium cyanide in both containers showed that this particular batch of the poison was “not very water-absorbent,” said Young, and thus “would not degrade capsules quickly.” In explaining this sudden reversal, Young said, “The work we did showed no time restrictions such as were previously reported.”

Young said more sophisticated testing by the FDA had determined that the poison was 90 percent potassium cyanide, which “can exist for several months. We don’t know just how long.” Interestingly, the cyanide in the 1982 Tylenol murders was also 90 percent potassium cyanide.

Young’s assertion that it took these “more sophisticated” tests to determine that the cyanide would not eat through gel-based capsules in 8 to 10 days, was hogwash. The FBI had advised Carl Vergari back on February 10
^th
that the cyanide would not eat through the Tylenol capsules within two weeks. Vergari had said then that “the potency of the poison could last almost indefinitely,” meaning the cyanide would have a negligible corrosive effect on the gel-based Tylenol capsules.

Since the cyanide-laced Tylenol capsules had a shelf life of many months, J&J’s manufacturing plants, warehouses, and distribution network could not be excluded as the likely source of the cyanide-filled Tylenol capsules. J&J and the FDA could no longer point to the pseudo-science of the super-corrosiveness of cyanide as evidence that the tamperings had occurred at the retail stores. Furthermore, the FBI and the FDA had also determined that the packaging on the bottles of poisoned Tylenol had not been tampered with, so it was obvious that the cyanide-laced Tylenol capsules had been put into the bottles before they were packaged.

On February 12
^th
, three days before the FDA came clean on the long shelf life of cyanide-laced Tylenol capsules, Fred Fricke, the director of the FDA’s Elemental Analysis Research Center in Cincinnati, had commented about the chemical analysis of the cyanide. Citing FBI instructions, however, Fricke said he could not discuss specific information about the cyanide. The FDA had known all along that the cyanide-laced capsules actually had a shelf life of many months, possibly years, but said nothing. Carl Vergari refused to go along with this misinformation campaign, because he did not want consumers to be lulled into believing that the lack of visible signs of corrosion was a guarantee that their Tylenol capsules did not contain cyanide. The FDA, on the other hand, knowingly hid the truth about the long shelf life of the cyanide-laced capsules, putting the lives of American consumers in danger.

In addition to the misinformation disseminated about the corrosiveness of the cyanide, the information disclosed about the second bottle of cyanide-laced Tylenol capsules was also inaccurate.
 
Initially, officials said that the second bottle had come from the Woolworth store in Bronxville. Andrew O’Rourke had discredited that claim during his appearance with James Burke and Frank Young on ABC’s
This Week
, when he said,
“This particular package in Woolworth’s had a different [lot] number than the rest of the packages in that same store. That would appear to be reverse shoplifting. Somebody came in and actually put it on the shelf.”

O’Rourke’s seemingly innocuous revelation triggered a flurry of “no comments” from FBI and FDA officials. The Bronxville police were more forthcoming, confirming that the lot number on the second bottle of cyanide-laced Tylenol was indeed different from the lot number on the six bottles of Extra Strength Tylenol capsules that had actually been in the Woolworth store. With the cat out of the bag, the FDA and the FBI then confirmed that the lot number on the second bottle of cyanide-laced Tylenol did not match the number on the six bottles from the Woolworth store. The second bottle of cyanide-laced Tylenol capsules had not been delivered to, or recovered from, the Woolworth store after all.
It had actually come from an A&P store.

On Tuesday, February 11
^th
, two days before the second and third bottles of contaminated Tylenol were discovered by J&J and FDA lab technicians at the FDA lab in Brooklyn, A&P released the following statement:

Yesterday
A&P
temporarily removed from sale all Tylenol capsules as a precautionary measure, related to a police investigation of a death in Westchester County, N.Y.

Since this type product is distributed from a central A&P warehouse, we were compelled to suspend sales in all [1,000] A&P stores pending further information and a 24-hour search for the questionable product code.

The code number of the product being examined, ADF916 - expiration date May 1987, has been removed from our stores and turned over to the U.S. Food and Drug Administration for inspection.
Based on preliminary information received from the Food and Drug Administration and Johnson & Johnson, we anticipate clearance for a resumption of the sale of Tylenol products in the immediate future.

Frank Young said the second and third bottles of contaminated capsules were found during testing of 60,000 Tylenol capsules from somewhere around 1,500 bottles. Those 1,500 bottles had all come from A&P stores. Only A&P stores had turned their Tylenol over to the FDA.

James Burke said the Tylenol in the first and second bottles of cyanide-laced Tylenol had been shipped from J&J’s Montgomeryville distribution center to an A&P distribution center that moves Tylenol through 38 states, and a Woolworth’s distribution center that moves Tylenol through 26 states. However, since the second bottle was not actually shipped to the Woolworth store, it obviously had not gone through a Woolworth distribution center. Furthermore, Burke’s claim that the first bottle of cyanide-laced Tylenol had been shipped to an A&P warehouse was also not quite correct.

A&P said products like Tylenol are “distributed [to its stores] from a central A&P warehouse.” However, that warehouse was not actually owned or operated by A&P. Since 1981, C&S Wholesale Grocers had been under contract to act as A&P’s primary distributor. All three bottles of contaminated Tylenol were distributed from one central warehouse where the Tylenol killer likely planted the cyanide-laced Tylenol capsules
.

*****

J&J spokesperson Robert Kniffin said, “The Company considered it unlikely that the tainting had occurred [at J&J’s Montgomeryville distribution center], because each bottle was
usually
safeguarded by five seals… The bottles at the distribution center are
typically
covered by two additional sealed wrappings: A clear plastic binder that is heat-sealed around all sides of six bottles, and a shrink-wrapped plastic binding around groups of cartons, each of which contains 12 groups of six-packs” (emphasis added). Not all Tylenol was bottled before it was shipped from the Montgomeryville facility. Some Tylenol was shipped in bulk containers and bottled at repackaging facilities.

McNeil President, Joseph Chiesa, inadvertently provided an additional clue that the Tylenol batches implicated in the tamperings had not yet been bottled when the Tylenol was shipped from Montgomeryville. Chiesa said there were about one-million bottles of Tylenol capsules in the distribution channel in February 1986. At that time, J&J was selling about $10 million worth of Tylenol per week. About 30 percent of that, or $3 million per week, was Tylenol capsules. At an average price of $3.70 per bottle (ten cents more than the avg. price in October 1982), J&J was selling about 811,000 bottles of Tylenol capsules per week ($3,000,000 / $3.70 = 810,810). That means there were enough bottles of Tylenol capsules in the distribution channel in February 1986 to cover about nine days of sales (1,000,000 / 811,000 = 1.23 weeks = 9 days of supply).

J&J and the FDA said Tylenol was a very high turnover product, meaning stores sold through their inventory of Tylenol capsules quickly. FDA spokesperson, William Grigg, said that because Tylenol is a popular item, most of the contaminated lot units were likely sold within a month. A wholesaler that purchased bottles of Tylenol would not still be shipping those bottles six months later to retailers that were turning their inventory over every nine days. The shipments of Tylenol capsules up to six months in advance of demand does not reconcile with that rapid turnover and the nine days of supply of Tylenol capsules in the distribution channel.

It is extremely unlikely that Johnson & Johnson was actually booking those Tylenol shipments as revenue six months ahead of actual demand. The Tylenol in the bottles of cyanide-laced capsules had apparently been shipped in bulk containers of Tylenol powder to a repackager under contract with Johnson & Johnson to package that Tylenol. The contract length must have been six months, because Chiesa and Burke both said that consumers had purchased 95 percent of the Tylenol from the first contaminated lot by February 10, 1986, which was about six months after it had been shipped from J&J’s Montgomeryville facility.

J&J booked the bulk Tylenol shipments as revenue, on multiple invoices over a period of time, as the repackager packaged and then sold it to distributors and retailers. This is how Johnson & Johnson recognizes revenue, and this is how Johnson & Johnson was able to ship Tylenol as much as six months in advance of demand but still have less than two weeks of supply of Extra Strength Tylenol capsules in the distribution channel.

Johnson & Johnson’s “Position Paper on Accounting for Inbound Finished Goods Freight” describes the treatment of finished goods, such as bulk Tylenol sold to a repackager, as follows:

In-bound finished goods freight is freight that moves finished goods, prior to being sold, from the sub-contractor or from the J&J manufacturing facility to a distribution center that is not part of the manufacturing facility. The
distribut
[
or] can be a J&J or 3rd party distribution center. The inventory remains on J&J’s books since it has not yet been sold. The distribution center serves as the finished goods warehouse where the goods are stored until they are sold to 3rd parties.

In cases where J&J ships products to wholesale distributors and repackagers - these products remain on J&J’s books as inventory until the wholesaler sells them to retail and institutional buyers. The repackager is not actually a J&J customer/buyer – it is a J&J contractor. J&J’s policy on revenue recognition provides further insight:

If the customer specifies an intermediate delivery location where a significant portion of the sales price is not payable until delivery to a final location is made; then criteria for revenue recognition are satisfied when delivery to the final destination occurs.

In cases where J&J delivers bulk shipments of Tylenol to an “intermediate delivery location” for future delivery, J&J’s revenue recognition policy requires that these sales shall not be recorded as revenue until the Tylenol is delivered to the final destination - i.e., the retail or institutional buyer. In the case where the “intermediate delivery location” is a repackager – J&J invoices the Tylenol in multiple sales transactions as the Tylenol is packaged and delivered to the actual buyers over a period of time.

At the time of Diane Elsroth’s death, the fiber drums of bulk Tylenol powder from Lots ADF916 and AHA090 were nearly empty, and the repackager was probably about to receive another shipment of six months’ worth of bulk Tylenol from McNeil. When J&J and the FDA learned that Diane Elsroth’s Tylenol capsules had come from an A&P store, they apparently already knew the identity of the repackager where the tamperings had actually occurred, and also knew that this repackager serviced only A&P stores. Hence, there was no need to confiscate Tylenol capsules from stores other than the A&P stores.

The first clue to the true source of the cyanide-laced Tylenol that killed Diane Elsroth had been provided by Jack Ogun, the director of the Division of Drugs, Devices and Cosmetics for the Pennsylvania State Health Department. On February 10
^th
, Ogun had told the Philadelphia
Inquirer
that Health Department investigators were going to contact Johnson & Johnson the next day to learn whether any of the Tylenol from the poisoned batch had made its way to Pennsylvania retail stores.

Ogun then provided a seemingly benign bit of information regarding the shelf life of Tylenol. Oddly, he was the only official to ever publicly mention the shelf life of Tylenol during the Tylenol tampering investigations in either 1982 or 1986. Ogun said that the May 1987 expiration date of Elsroth’s tainted bottle of Tylenol indicated that it would have been in stores for about two years, because non-prescription pain-relievers generally have a shelf life of about three years. The shelf life of Tylenol was in fact three years, just as Ogun had said. The Tylenol Professional Monograph states: