Johnson & Johnson (NYSE:JNJ) told MassDevice.com today that it plans to make an unspecified number of job cuts, consolidate facilities and change the reporting structure on some of the sales units within its diabetes unit to "get in front" of pricing and reimbursement pressures.
David Detmers, director of communications for Johnson & Johnson’s diabetes solutions business, told us that the company made an internal announcement to employees this week.
As part of the restructuring, the New Brunswick, N.J.-based medical products conglomerate will make an unspecified number of job cuts, transfer 1 of its sales units from the LifeScan business to the its Janssen division, which houses Johnson & Johnson’s entire pharmaceutical line, Detmers told us.
Detmers also said J&J plans to consolidate a LifeScan facility in Milpitas,Calif., with another JNJ facility 12 miles north in Freemont. Those moves are expected to be completed by mid-2014, he said.
LifeScan, part of JNJ’s medical device & diagnostic unit, makes blood glucose monitoring systems for home and hospital use. Detmers said the sales unit moving under Janssen’s purview sells into healthcare facilities and has been working with the pharma unit on the rollout of Invokana, a drug for Type II diabetics. Detmers would not say how many employees worked in that particular sales unit.
The moves come as JNJ’s diabetes unit continues to struggle with pressure from changing market conditions.
Sales within the division have slipped 11.5% during 2013 to $1.75 billion, compared to $1.97 billion for the 1st 3 quarters last year. Johnson & Johnson blamed new competitive bidding rules for the slide in a recent filing with the federal Securities & Exchange Commission.
Detmers said the pricing pressure facing Johnson & Johnson are universal to the industry and a global problem. New competitive bidding rules employed by the Centers for Medicare & Medicaid Services have cut up to 70% of the reimbursement for blood glucose testing supplies, he added.