Yes, your financial budget and risk-management plan must make provision for resources in the event of a product recall. Although you do not necessarily need to set aside a specific “recall fund”, you must ensure that your financial position is sufficiently flexible to cope with one. A product recall can give rise to a range of direct and indirect costs: 1. “Logistics and reverse logistics costs”, namely the costs of retrieving and transporting affected products. 2. “Disposal costs”, for the safe destruction of recalled products. 3. “Replacement or refund costs”, for providing replacement products or refunds to customers. 4. “Communication costs”, for issuing notices to the public, customers and regulatory authorities. 5. “Loss of goodwill”, which is the most difficult cost to quantify but may be the most serious.
HONG KONG DRUG LICENSING
Should my financial budget include provision for a possible product recall event?
A complete explanation of the regulatory basis, Drew Tang’s recommendations and risk alerts. The original material dates from 2025; read it alongside the latest official requirements.
Original guide, 2025 edition: These FAQs are provided for topic-based reference and have not all been individually checked against current rules. Please confirm fees, personnel, renewal, changes and product requirements against the professional in-depth guide for the relevant licence type and the official requirements in force at the time.
Back to Category F: Fees, Budget and Financial Planning (Q251-Q300) Search more questions