Procter & Gamble Moves into the Neighborhood

LAST MONTH, A NEW RESIDENT BOUGHT INTO THE LABORATORY TESTING NEIGHBORHOOD. Procter & Gamble Company spent a third of a billion dollars to enter a joint venture with Inverness Medical Products, Inc., with the specific goal of selling diagnostic test kits to consumers in pharmacies, grocery stores, and other retail outlets.

As you will read on pages 7-9, Inverness Medical Products—already a major player in consumer self testing—just outbid Beckman Coulter Corporation to acquire Biosite, Inc., which has a significant presence in the point-of-care test (POCT) market. On the same day that Inverness announced its acquisition of Biosite, it also announced the formation of its joint venture with Procter & Gamble. The two companies formed SPD Swiss Precision Diagnostics GmbH (SPD), which will be based in Geneva, Switzerland. Inverness tossed its kits for home pregnancy tests and fertility/ovulation monitoring into the joint venture. Procter & Gamble made a $325 million investment for its contribution.

I consider this to be a notable development. It brings one of the world’s most respected companies in consumer products a step closer to the laboratory testing marketplace. P&G’s interest in consumer self testing is based on its belief that consumer demand for health services and healthcare products will soar in the coming decades. Thus, it wants to position itself to be a distribution, marketing, and sales channel for healthcare-related products.

Some of you keen observers probably already know that P&G markets a number of therapeutic drugs. For example, when Prilosec, the heartburn medicine, came off patent, P&G convinced the drug’s owner, AstraZeneca, to allow it to market over-the-counter sales of Prilosec.

What does Procter & Gamble’s move into the laboratory testing neighborhood mean for pathologists and lab directors? In the short term, there is likely to be no impact. However, in future years, P&G’s vaunted expertise in product development and its ability to launch new products that quickly achieve market dominance could be harnessed to introduce specific diagnostic technologies that expand the types of consumer self-tests sold on retail shelves. That is not likely to affect the volume and menu of tests performed in clinical laboratories. But it certainly has the potential to transform consumers into more sophisticated users of diagnostic tests.


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