FDA warns drug makers about posting ads on search engines
A lot of news has been coming from the Food and Drug Administration lately. And that’s almost never good news for the pharmaceutical business.
The FDA recently has taken a number of regulatory actions against drug companies on matters ranging from marketing of unapproved drugs, to pulling unsafe drugs from the market, to drug advertising.
In one recent case, the agency issued a warning to pharmaceutical companies about ads on Web search engines that it deemed misleading and misbranded because they allegedly did not properly link information about the drugs’ efficacy with risks to safety.
In another, the FDA ordered nine drug makers to stop manufacturing and distributing unapproved opioid drugs, many of which have been on the market since decades before current drug regulations were adopted.
And on Wednesday, the agency and Genetench announced that the psoriasis drug Raptiva (efalizumab) would be pulled from the market by June 8 over concerns that emerged in February that its use could lead patients to develop progressive multifocal leukoencephalopathy, a deadly viral infection of the brain. European regulators removed it from the market there as soon as the concerns arose.
With the withdrawal of Raptiva, which already happened in Europe in February, Genentech – recently acquired by Roche – will lose a drug that generated $108 million in sales last year, according to Genentech financial data. Companies like Boehringer Ingelheim and Mallinckrodt can’t continue making or marketing certain opiate-based painkillers until they get FDA approval, causing them to lose sources of income as well. And the FDA’s requirement that such companies as Pfizer, Eli Lilly & Co., Johnson & Johnson and Cephalon take down the ads in question, means fewer patients will be asking their doctors about what the companies’ drugs can do for them.
Overall, an increasingly assertive FDA could mean a decrease in top-line pharmacy sales growth as the agency subjects drugs to more scrutiny before they reach the counter, or even long after they’ve reached it.
Target reports March sales
MINNEAPOLIS Target reported that its net retail sales for the five weeks ended April 4 decreased from the year-ago period.
The retail giant reported that net earnings were $5, 5434 million, down 2.3%, from $5,676 million for the five weeks ended April 5, 2008. On this same basis, March comparable-store sales declined 6.3%.
“March sales were modestly better than our planned range, and reflected the adverse impact of the move of pre-Easter holiday shopping days from March last year into April this year.” said Gregg Steinhafel, chairman, president and CEO, Target Corporation. “Our guests continue to be cautious, but we have begun to see encouraging signs in the operating results of both of our business segments. In light of the Easter shift and recent trends, we expect our April reported comparable-store sales results to be essentially flat to last year.”
Target Corporation’s retail segment includes large general merchandise and food discount stores and Target.com, a fully integrated on-line business. In addition, the company operates a credit card segment that offers branded proprietary and Visa credit card products. The company currently operates 1,699 Target stores in 49 states.
Fred’s reports decline in sales
MEMPHIS, Tenn. Fred’s on Thursday reported a 1% decline in total sales for the five weeks ended April 4, generating $175.4 million in sales.
The decline reflects the closing of 74 underperforming stores and 22 underperforming pharmacies last year, the discounter reported. Excluding stores closed during 2008, total sales from ongoing stores increased 4% in March versus the same month last year. Comparable-store sales for the month rose 1.9%, versus an increase of 1.2% in the same period last year.
“Our progress in building both traffic and average ticket continued during March, as indicated by comparable-store sales growth at the high end of our plan,” stated Bruce Efird, Fred’s CEO. “This performance, which also reflected higher pharmacy department prescription counts is gratifying, considering the tough retail environment we face. Those same challenges, however, continue to drive growing consumer interest in discount retailers, and Fred’s remains well positioned to deliver great value to its customers.”