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Roche to cut local jobs after diabetes-care sales plunge

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Plunging revenue from its blood-glucose monitors has forced Roche Diagnostics Corp. to cut its staff, the company informed its workers last week.

Roche, which operates its North American headquarters in Indianapolis, suffered a 14-percent decline in revenue in its diabetes care unit during the first six months of the year. Roche has reportedly put that unit up for sale, according to a May report by the Reuters news agency.

"The U.S. diabetes care market is rapidly evolving, and Roche’s diabetes care business in the U.S. is responding by making changes to its customer service and manufacturing operations, which includes the elimination of some jobs,” spokesman Todd Siesky wrote in a prepared statement. “Roche is confident that its diabetes care business in the U.S. is well positioned for the future."

Siesky declined to disclose the number of workers that will be let go, but said the jobs will be eliminated over the next several months. The cuts will affect Roche’s customer service group in Fishers and its diabetes manufacturing plant on the far northeast side of Indianapolis.

Between the two sites, Roche employs more than 900 diabetes care workers in the metro area.

Diabetes care accounts for roughly one-third of Roche's Indianapolis-area work force of 2,900. Roche’s other workers here oversee and provide administrative support for Roche’s three other business units, which sell medical testing equipment to hospitals, doctors and researchers around the country. Sales of Roche’s non-diabetes products rose 3 percent in the first half of 2013, compared with the first half of 2012.

A year ago, Roche cut 100 jobs between its Indianapolis diabetes team and another diabetes plant in Germany, after cuts to reimbursement and competition from generic blood glucose monitors reduced sales.

During the first six months of this year, sales of Roche’s North American diabetes products totaled $224 million. During the same period of 2012, the sales totaled about $257 million.

And it’s going to get worse. The price of blood-glucose monitors—which account for 90 percent of Roche’s diabetes care revenue—will be hammered by a new competitive bidding process instituted July 1 by the federal Medicare agency.

Some projections indicated the program would reduce its payments for blood-glucose monitors 72 percent. And private health insurers in the United States often follow Medicare’s prices.

In the United States, blood-glucose monitoring has been a declining business since sales peaked in 2007 at nearly $3 billion, according to data from San Francisco-based market research firm Close Concerns Inc.

“The BGM industry is under immense pressure due to both pricing and reimbursement challenges,” Close Concerns analysts Kira Maker, Adam Brown and Kelly Close, said in a May report on Roche.
 

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  • Loo$e Change
    Speaking of leasing buildings, don't forget Roche lost that appeal after breaking the lease the Marsh Headquarters building earlier this year. That was $18.2 million and probably (at least) the same amount in legal fees to Bose, McKinney & Evans tacked on: http://www.ibj.com/appeals-court-upholds-marshs-182m-award-from-roche/PARAMS/article/40531
  • Campus consolidation
    Roche is not "in the middle of a major expansion" of its campus. They are in the process of building a new education building to replace an old building (which will be leveled). They are also in the process of moving employees onto their campus to eliminate the need to lease other office buildings off campus. Although their diabetes business is faltering, Roche is doing well. Roche has many other profitable business areas.
    • All About Money
      ***have = half
    • All About Money
      In June 2012 Roche Diagnostics Corp. announced plans to spend $300 million on an expansion of its Indianapolis headquarters, creating 100 jobs by 2017. Big deal; so what? Roche Diabetes Care has milked the cash cow dry and meters and strips are no longer a profitable area. Last week about have of the consumer technical support group at the Accu-Chek call center was let go. As a market leader Roche will continue to innovate healthcare, just in areas where it is highly lucrative.
      • Roche Question
        With this news why are they in the middle of a major expansion of their NE side buildings?
        • Roche
          The comments about Roche espousing "greed" are unsubstantiated, and do not reflect the immense investment that the company has made in bringing these products to customers. It would likely help the writer to become a little more knowledgeable about health care research and the immense effort it takes to bring products to market.......far more than any other industry.
        • It's their own fault
          Roche's greed priced themselves out of the diabetes product market. Their test strips have always cost twice as much as others on the market and when a person tests before every meal and before bed (or a type 1 diabetic tests 7-10 times a day)that gets expensive - especially for those without health insurance. Each test strip $1.00 x 7 times a day x 30 days is $210 a month - just for test strips. They got beat at their own game.

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