Excedrin factory a recurring migraine for Novartis CEO

ZURICH Thu Oct 25, 2012 11:12am EDT

ZURICH Oct 25 (Reuters) - Delays to restarting production at the U.S. factory that makes Novartis AG's popular migraine medicine Excedrin are turning into a major headache for the Swiss drugmaker's boss.

Joseph Jimenez is so fed up with having to push back the timeline to restart manufacturing at its consumer health site in Lincoln, Nebraska that he's given up making forecasts.

"What I would like to do is stop making projections, because we've proven that we are not able to accurately project," Jimenez told reporters at its third-quarter results presentation.

Novartis suspended production at the site late last year after consumers complained of chipped and broken pills, inconsistent bottle packaging and the mixing of different products in the same container.

The company had hoped for production to restart in May, with shipments of over-the-counter (OTC) brands resuming mid-year, but it has been forced to repeatedly push back that timeframe.

Novartis is the latest in a string of big drug makers to be plagued by manufacturing issues, as price pressures and the loss of patents on best-selling treatments force them to trim costs.

In the most high-profile case in recent years, Johnson & Johnson Chief Executive William Weldon stepped down in April after repeated recalls called into question the quality of the healthcare group's products.

Novartis Chief Financial Officer Jon Symonds said last year that J&J's quality control problems had allowed the Swiss group to grab market share from its U.S. rival.

Now its consumer health business is hurting from its own quality issues. Sales at the division fell 22 percent in the third quarter, on top of drops of 24 and 20 percent in the prior two quarters. The site has annualised sales of $1 billion.

Novartis is banking on a loyal following of consumers to make sure the sales hit is not permanent. Jimenez said the drugmaker had received numerous emails from consumers asking when Excedrin would be available again in the United States.

"If you have brand loyalty people miss you and while it's unfortunate ... being missed as a brand is what you strive for," said Jane Parker, CEO of InterbrandHealth.

"In Excedrin's case when you look around the Internet people are searching for Excedrin. It has a loyalty and there is an implied commitment between the customer and the brand."

Novartis said on Thursday it had outsourced the production of three OTC products - Lamisil, Excedrin and Triaminic - to third party manufacturers to get products to consumers as quickly as possible.

Jimenez said these products should be available in the fourth quarter. "We're going to go and thank our most loyal users for waiting with us," he said.

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