Diabetes sales weaken with economy

With only just a few days into first quarter earnings reporting, and already a not-so-encouraging trend is emerging as it relates to diabetes  drugs and testing products. Diabetes products are experiencing a  negative impact from the broad, weak economy as diabetics are looking to  save money in how they treat their disease, say analysts at Zacks  Investment Research. These include testing less often and using lower  doses of medication. As a result, wholesalers are looking to carry lean  inventory on these products.

Johnson & Johnson reported earnings on April 14, and although the  analysts had expected some weakness in diabetes product sales, they were  surprised to see US turnover down 11%. This is significantly weaker than  the 4% growth posted in the first quarter of 2008. The company  attributed the weak sales to softness in the economy and diabetics  cutting back on out-of-pocket expenditures. A significant portion of  J&J's diabetes revenues come from test strips which patients use to  check blood sugar levels.

As unemployment rises and health insurance coverage ceases, some people  begin to cut back on health care related expenses. For some diabetics  this means reducing potentially life-sustaining drugs and testing  products, which can run as much as $500/month or more.