A healthy GSK Consumer may not need Pfizer infusion
With the release of year-end financials next week from Reckitt Benckiser, the picture on who is still in the running as a potential suitor to Pfizer’s Consumer Healthcare business may come into better focus. Last week, it appeared that the other rumored front-runner GSK Consumer Healthare may be nonchalant to the possibility of a Pfizer Consumer acquisition.
Pfizer’s consumer health division is expected to sell for as much as $20 billion, according to reports.
“I will reiterate what I’ve said previously – first of all, you would expect us to take a serious look at any major assets that come up in the market,” Emma Walmsley, GlaxoSmithKline CEO, told investors when asked about the Pfizer Consumer sale. “This is an attractive business. We are a world leader in consumer healthcare and we have a good track record of integrating businesses effectively, but our first priority remains pharma and both investing in the launches and the execution that we have underway, but also more specifically prioritizing the pipeline within pharma. We will not do anything that cuts across that prioritization.”
So the Pfizer Consumer acquisition is not on the “need-to-do list” Walmsley said.
But Pfizer’s strength in OTC pain relief may be a good fit against the portfolio of GSK Consumer Healthcare, particularly for Voltaren, a prescription-only topical pain reliever that in the past has been speculated as a possible Rx-to-OTC switch candidate. Just this past quarter, GSK Consumer Healthcare launched Voltaren No-Mess launching in Germany, the company’s largest Voltaren market.
“In consumer healthcare, we saw improving sales momentum throughout the year with strong performances in wellness and oral health offsetting the impact of a weak U.S. season and competitive pressures in allergy,” Walmsley said. “Our power brands continue to deliver strong growth above market levels, and this has helped drive margin improvements.”
Specifically, GSK’s consumer division generated $9.6 billion for fiscal 2017, up 2% on a constant exchange rate. GSK Consumer Healthcare’s power brands were all growing at high single digits over the company’s fourth quarter ended, added Brian McNamara, GSK Consumer Healthcare CEO. “We benefited from an earlier and more severe cold and flu season in the U.S., but importantly our Theraflu brand is growing well ahead of the market. We also are seeing share growth back on Flonase in the U.S. as we anniversary the private label entry,” he said. “Overall, I feel really good about the health and momentum in the business.”
Influenza illness rates set new records, CDC reports
It’s official. On Friday the 2017/2018 influenza season entered the record books as one of the worst seasons ever with doctor visits due to flu-like illnesses reaching 7.7%. The previously recorded high for that was 7.6% for the 2003/2004 season.
And this year, there is still no end in sight.
“We were hoping to have better news to share today, but unfortunately it looks like this flu season continues to be particularly challenging,” Anne Schuchat, acting director, Centers for Disease Control and Prevention, said during a Friday morning press conference with reporters. “Our latest tracking data indicate that influenza activity is still on the rise overall. In fact, we may be on track to break some recent records.”
Schuchat suggested practitioners take a proactive approach to treating patients complaining of flu-like symptoms. “There is a lot of flu out there right now. If it looks like flu, it probably is,” she said. “Anti-virals can mean the difference between a minor illness and a hospital stay or worse. And they work better if they’re started earlier.”
While there have been spot shortages of anti-viral medicines in those areas with high flu incidence, there is no national shortage according to the manufacturers of the medicines, Schuchat said. “For patients, that might mean calling more than one pharmacy to fill a prescription,” she said. “Here at CDC, we have been working closely with the commercial supply chain and pharmacies to address gaps in the market and increase access to brand products when the anti-viral generics aren’t available. We appreciate the efforts of suppliers, pharmacies and insurers to try to smooth things out.”
This season is already breaking from the traditional illness tracks of the past five seasons with regard to its severity, Schuchat noted, so using the illness trajectories of seasons past to predict the duration of the rest of this season may not product a reliable prognosis. But for the past five seasons, doctor visits due to inlfuenza-like activity remained above the national baseline of 2.3% for as many 20 weeks and we’re 11 weeks into the 2017/2018 season, Schuchat said.
“In addition, overall hospitalizations are now significantly higher than what we’ve seen for this time of year since our current tracking system began almost a decade ago in 2010,” Schuchat said. “The rate is approaching the final rate of hospitalizations that we observed at the end of the active 2014/2015 flu season, our most recent severe season.”
As many as 34 million Americans have been impacted by flu during past severe seasons. “One of the areas where we’re really seeing unusual levels of hospitalizations is in non-elderly adults, where so far this year we’ve seen 63.1 per 100,000 for people in the 50 to 64 year age group be hospitalized with flu,” Schuchat said. “In 2014/2015, that number was 35.1. That’s our most recent severe season and we’re quite a bit higher than that.”
Schuchat debriefed Health and Human Services Secretary Alex Azar on Wednesday. The department has been actively monitoring and responding to this year’s especially severe flu season, which has seen hospitalizations reach the highest levels since HHS began tracking such data closely in 2010 and simultaneous high levels of flu activity in more regions of the country than usual. Schuchat noted that information about the effectiveness of this year’s seasonal flu vaccine, which is still available and recommended for almost all Americans, will be released soon.
All told, 48 states are still reporting widespread influenza activity. The only two states not reporting widespread activity are Oregon and Hawaii, where the flu appears to have run its course in one state and an ocean separates the other state from the mainland. “Oregon and Hawaii are reporting regional , or less widespread, activity,” Schuchat said. “Last week we reported that parts of the West Coast were seeing declines in flu activity. That’s still true for H3N2 viruses [this year’s predominant strain], but some Western states are beginning to see an increase in influenza B activity. It’s not uncommon for there to be second waves of influenza B activity during an influenza season.”
IRI explores how hard the flu is hitting retail
Everyone’s been talking about how hard hit the nation is from the current flu season, but not many have been dishing about what’s happening at the checkstand.
IRI on Wednesday released a comprehensive report outlining the initial impact of this year’s virulent flu season, as well as a size-up on how much out-of-stocks are hurting retailers who are running out of cough-cold supplies.
“We all know what it feels like to shop for medicine when you’re sick, only to find an empty peg or shelf,” Bob Sanders, executive vice president of IRI’s Health Care Practice, said. “When this happens, one-third of consumers will make their purchase at a different store, and fewer than half will make a substitute purchase. Manufacturers and retailers must be prepared when the flu sweeps through town. Since market nuances are very important, we leveraged the IRI Illness Tracking to uncover flu trends market by market and store by store, so consumers from Little Rock to Houston don’t have to face that dreaded empty shelf.”
The flu is now widespread nationwide, and it will take weeks before the epidemic begins to subside. The Houston market has been hit hard, with 11.8% of its population battling the flu, and New Orleans (11.7%), Mobile, Ala. (11.7%), San Diego (11.7%), Dallas (11.1%) and St. Louis(9.9%) are following closely behind.
IRI’s new report, “Flu Fury: IRI Pinpoints How Flu Is Impacting U.S. Markets” examines how specific regional markets are being impacted by the flu and correlates how purchase behaviors vary at the market level. The research helps retailers anticipate inventory needs and avoid the typical 4% sales loss caused by out-of-stock products.
The spread of the flu virus is creating strong sales growth across many over-the-counter health care categories that treat and manage symptoms. For the four weeks ended Jan. 14, sales of cough syrups were up 39.9% nationwide; sales of cough-cold liquid formulations were up 35.1%; and sales of cough-cold tablets were up 26.8%
Like many things in life, though, one size does not fit all. Comparing trends for the entire United States versus specific regional markets provides a clear illustration of the pronounced variations. For example, sales increases for those categories in Houston climbed 46.1%, 40.6% and 33.2%, respectively. In San Diego, dollar sales of those categories were up 99.3%, 83.8% and 61.9%, respectively.
“With health officials reporting that this year’s flu season is now more intense than any since the 2009 swine flu pandemic, retailers must invest to understand the impact this type of event has on their sales and shopper interactions,” said Susan Viamari, vice president of Thought Leadership for IRI. “They simply can’t paint a broad brush stroke across their stores and end up with an accurate picture. You really need to look at stores by specific markets, because stock-outs will have a major negative impact on sales, and that can hit the bottom line very hard, translating to $40 million per year for a billion-dollar retailer.”
Other categories benefiting from the rush on cough-cold supplies include spray disinfectant (nationwide, sales were up 39.5% for the four weeks ended Jan. 14), RTD baby electrolytes (29.2%), single-cup teas (21.1%) and ready-to-serve soups (19%).