Part of new OTC Joint Venture with Procter & Gamble
Consumer products maker Procter & Gamble and Israel-based Teva Pharmaceutical Industries have announced details of the joint venture they have created to sell over-the-counter medicines that will combine Teva’s expertise in drug marketing with P&G’s expertise in branding to expand their presence in the $200 billion consumer healthcare industry. The venture will be known as PGT Healthcare, and the companies said it “will focus on best-in-class development and state-of-the-art commercialization of branded OTC medicines.” The JV will be based in Geneva, Switzerland, and will operate in all markets outside the United States. The partnership will also develop new brands for the North American market, and will start off with $1.3 billion in annual sales with the
potential to grow to $4 billion in annual sales toward the end of the decade, the companies said.
Teva will bring broader pharmacy distribution, including its pharmacy sales force and pharmacy relationships to P&G’s leading brands, which include Vicks, Metamucil and Pepto-Bismol. Teva’s portfolio of products includes vitamins, minerals, medicated skin products and, potentially, prescription drugs that in the future may be sold over the counter.
In connection with the formation of the joint venture, P&G has sold its OTC plants in Greensboro, North Carolina, which produces Vicks, and in Phoenix, Arizona, which produces Metamucil. It will transfer the employees of both plants to Teva which will be the manufacturer and supplier for the PGT Healthcare business and P&G’s North American OTC business. Greensboro officials expressed excitement about the operation’s new ownership of the Swing Road facility. Though an expansion at the plant is not planned, the expected increase in demand from moving into new markets could eventually bring investments in capital or personnel, said Brent Holmes, Contract Labor Supply Manager for Proctor &Gamble’s two Greensboro facilities, one of which will continue to be operated by P&G. “Teva has access to some international countries that we don’t have access to,” he said.
“This important transaction reinforces Teva’s long term strategy of building out our branded and specialty pharmaceuticals business through diversification and expansion of our product portfolio and pipeline, while enhancing our position as the worldwide leader in generics,” said Shlomo Yanai, President and CEO of Teva.