J&J says revived OTC brands are ‘winning the hearts of consumers’
pharmafile | July 19, 2013 | News story | Manufacturing and Production, Sales and Marketing | Control, FDA, GDP, J&J, JJ, OTC
Johnson & Johnson doesn’t usually provide specific financials for its over-the-counter pharmaceuticals business, but did so for the first time in its second quarter figures this week.
Rather than lumping OTC with nutritionals and other consumer health products in its results statement as usual, the company revealed a 5.4% growth in sales to $883 million which it said heralds the recovery in a business that has been hamstrung by quality control problems since 2010.
The performance in OTC pharma outstripped overall consumer healthcare sales – which rose a little over 1% to $3.7 billion – and was even more robust in the US where turnover climbed more than 17% driven by strong growth in analgesics such as Tylenol and other key OTC brands.
“Our consumer segment is showing signs of its continued return to growth through its increasing momentum in returning a reliable supply of US OTC products to the shelves,” said chief executive Alex Gorsky.
Three facilities in J&J’s manufacturing network are still operating under a US Food and Drug Administration (FDA) consent decree, which was implemented in 2011 after the regulator uncovered numerous Good Manufacturing Practice (GMP) violations which had already led to the recall of millions of OTC products.
Since then J&J has undertaken a major revamp of its manufacturing and supply chain activities – not just in consumer but across the board – a project overseen by Sandy Peterson, who joined the firm as chairman at the end of last year.
“Our priorities in the US OTC business are … to deliver on our consent decree milestones [and] ensure reliable supply of OTC products to retailers and consumers,” said Peterson on the company’s third-quarter conference call, reiterating the target of returning three-quarters of all J&J’s brands to the market by the end of 2013.
“Our consent decree work plan was approved by the FDA without modification in the fourth quarter of 2012, she said, adding: “We’ve achieved 100% on-time execution of the prescribed steps through the second quarter.”
The first half of the year saw OTC operational growth of almost 20%, with 26% growth in revenues for OTC medicines, said Peterson.
“We are winning the hearts of consumers as these products return to the shelves in all four segment cough, cold and flu, allergy, pain and digestive health,” she claimed, noting that Extra Strength Tylenol is the number one product in adult pain while Children’s Tylenol and Motrin have been restored as the leading brands for paediatric pain.
Audit programme
Turning to the wider project to boost quality and compliance across the group, Peterson noted J&J has deployed 34 common quality standards for all its subsidiaries around the world and is coming to the end of a three-year internal audit programme that has scrutinised its 120 production facilities, as well as strategic partners among its 500 external manufacturers.
The number of contractors and external material suppliers has also been reduced by a third from the start of the review, to make it easier to monitor and manage the network.
Meanwhile, each of the business divisions now has a director responsible for quality and overseeing the compliance programme, although the scale of the task is huge given that J&J has more than 300,000 stock-keeping units (SKUs) around the world.
“We are putting in place processes and systems so that we have early warning … there may be something wrong with a product,” said Peterson. “That’s where our vigilance has to be, ensuring every single one of those SKUs are meeting our high standards”.
Phil Taylor
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