Swiss company with Indianapolis operations considers pullout
The Indianapolis operation of Roche Diagnostics Corp has likely seen healthier times. Despite unfettered growth internationally, where Roche has outpaced its competitors, its American operations have been troubled by diminished market share in diabetes related products.
Specifically, Roche's Disetronic insulin pump sales have diminished greatly over the past 10 years. A 2001 U.S. market share of 20 percent had diminished to just 4 percent by 2004. The difficulties have prompted Roche to being layoffs in its Disetronic unit, which employed approximately 200 people at its Fishers headquarters. Added to last year's announcement that Roche would move 300 lab equipment-related jobs to Germany by 2011, the Indianapolis economy has a lot of high-paying jobs to lose when Roche decides to cut its U.S. operations.
These cutbacks are in sharp contrast to Roche's market positions in the late 1990s and early 2000s, when several innovations allowed the company to capture significant share of the diabetes-related medical device market in the U.S.
An Indianapolis Business Journal (IBJ) article in late December detailed several reasons for the company's slide in market share, attributing FDA nay-says and recalls to declining sales in the U.S.
Upon acquiring the Disetronic unit in 2003, the FDA disapproved of Roche's factory in Switzerland for the production of the insulin pumps, which kept them off the U.S. market for about two years.
David Kiff, publisher for the Diabetic Investor, said, "At one time, they were on top of the world. But they didn't adapt to the changes."
Arguably, search marketing is another innovation which has evaded Roche. A Google search for "insulin pumps" and several supporting terms nets no results for Roche on the first three pages of search results. Google's reports that over 18,000 people searched specifically for "insulin pumps" in November of 2009, with similar figures preceding it throughout the year. Microsoft/Bing reports 1,800 searches during the same time frame.
A marketing executive for Roche might argue that customers in the diabetes business who buy from Roche do not find them online. This argument would be valid, considering Roche's lack of online visibility for a now-faltering product line.
Would such visibility offer a valuable return for the company? This could depend on which groups are actively searching for "insulin pumps." If Roche has an interest in marketing to both end users and distributors of its product, it has the capability to impress upon hundreds of thousands of potential customers.
Bruce Frank, a former Roche employee turned consultant commented in the IBJ article to not count Roche out. "It's a very strong company; it's got a lot of money. It can do what it wants to do when it wants to do it."
I have no doubt that is true.
Here is a link to the IBJ article: (which goes into more detail: http://www.ibj.com/article?articleId=15234)
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