Obituary: James E. Burke / Johnson & Johnson CEO during Tylenol crisis
James E. Burke, whose leadership of Johnson & Johnson during the Tylenol poisoning tragedy in 1982 was admired for its decisiveness, openness and corporate self-sacrifice, died Sept. 28 in New Jersey. He was 87.
Neither the cause nor the exact location of Mr. Burke's death was revealed by the New Brunswick, N.J.-based pharmaceutical giant. Mr. Burke, a Princeton, N.J., resident, worked at the company from 1953 until 1989 and was chairman and chief executive for the last 13 years of his time there.
Mr. Burke's background was marketing, not medicine or pharmacology. He was responsible for putting the company's resources behind a long list of successful products, including baby shampoo, disposable contact lenses and most famously Tylenol, which in 1981 held 35 percent of the market for over-the-counter pain relievers.
It is with that drug (whose generic name is acetaminophen) that Mr. Burke's name will be forever linked in business-school case studies and seminars on corporate leadership.
"We talk about 'values-driven companies' -- that's what J&J was under Burke," said Joseph L. Bower, a professor at Harvard Business School. "There are people who think that large corporations are not toys to be traded in the market but are institutions to be built on and improved. If you did what was right, you made money."
Mr. Burke received the Presidential Medal of Freedom from President Bill Clinton in 2000. In 2003, Fortune magazine named him one of history's 10 greatest CEOs.
It was 30 years ago this week that Mr. Burke had a key role in the country's response to the chilling deaths caused by Tylenol capsules adulterated with the rapidly working poison cyanide.
On Sept. 29, 1982, two people in suburban Chicago -- one of them a 12-year-old girl -- died of cyanide poisoning. Investigators quickly determined that both had taken Tylenol. The Food and Drug Administration was notified, and the next day McNeil Consumer Products, owned by Johnson & Johnson, began recalling 93,000 bottles of the pills from an implicated lot.
Over the next two days, four people died in the Chicago area, and several days later a seventh and final victim. On Oct. 5, Tylenol laced with a different poison, strychnine, was found in California.
From the outset, Johnson & Johnson's response was notable for its candor. The afternoon of the first deaths, the company set up toll-free numbers manned by company employees. It sent 450,000 telex messages to doctors' offices, hospitals and trade groups. It stopped all Tylenol advertising.
On Oct. 6, Mr. Burke ordered the removal of all 31 million bottles of Tylenol capsules on American store shelves.
According to a case study of the events used at the Harvard Business School, the heads of both the FBI and the FDA opposed the wholesale recall, thinking it an overreaction.
"I listened and was sympathetic," Mr. Burke said, according to the case study. "But I was still very concerned that this was not the right solution, either from the point of view of the public, or from the point of view of my company's business."
More than 8 million capsules were tested for poison, and 75 were found to contain cyanide. All were for sale in the Chicago area. The perpetrator was never found.
The recall cost Johnson & Johnson $100 million immediately. Tylenol's market share -- tablets and other forms of the drug stayed on the market -- fell to 7 percent. Mr. Burke personally took charge of a committee to produce tamper-proof packaging.
When the company relaunched Tylenol capsules at the end of the year, it distributed 40 million $2.50 coupons in a gesture to recompense consumers for medicine they may have thrown away. By the following September, Tylenol had 30 percent of the market again -- nearly its pre-poisoning share.
The nightmare returned in 1986 when a 23-year-old woman in Westchester County, N.Y., died of cyanide poisoning after taking two Extra-Strength Tylenol capsules. The company decided not to institute a national recall. However, Mr. Burke decided the company would stop making capsules -- a formulation of the painkiller that accounted for one-third of Tylenol sales and was favored by many buyers.
Mr. Burke's tenure was not without mistakes.
In 1979, Johnson & Johnson acquired Technicare, a failing manufacturer of CAT scan and ultrasound equipment. Technicare continued to lose money, and in 1986 its remnants were sold to General Electric, with an after-tax charge of $300 million. Mr. Burke later said that "one of the things we learned is that it is very hard to manage a business you don't understand and that you don't really bring anything to."
James Edward Burke was born in Rutland, Vt., on Feb. 28, 1925. His father was an insurance and bond salesman and his mother a homemaker. He attended a Catholic high school and in 1942 entered the College of the Holy Cross in Worcester, Mass.
He was in the college's Naval ROTC program and spent a year on a landing craft in the South Pacific during World War II. "We were kind of spectators in the war," he later quipped.
He graduated from Holy Cross in 1947 and received a master's in business administration from Harvard in 1949. He worked for Procter & Gamble for three years before joining Johnson & Johnson.
His first marriage, to the former Alice Eubank, ended in divorce. In 1981, he married the former Didi Wormser. Besides his wife, survivors include two children from his first marriage, Clo Burke of San Antonio and James Burke of Princeton.
Two siblings also had successful careers in business. A brother, Daniel, was a founder of Capital Cities, a broadcast company that merged with ABC. He died a year ago. A sister, Phyllis Burke Davis, who survives, was an executive at Avon Products.
After retiring from Johnson & Johnson, Mr. Burke was chairman of the Partnership for a Drug-Free America from 1989 to 2005.
Stephen Dnistrian, who worked with Mr. Burke at the partnership and is now vice president of communications at Johnson & Johnson, said many friends thought that "if you wanted a cherry on top of your career this might not be the right job." However, Mr. Burke was widely praised for helping bring marketing know-how to bear on the problem of substance abuse.
Mr. Burke served on numerous corporate boards, including that of The Washington Post Co., from 1989 to 2000.
First Published October 6, 2012 12:00 am