Rural growth is holding up better than urban growth, says Nomura
Analysts of Q1FY14 results across the consumer sector have reported that rural growth is holding up better than urban growth, says Nomura Financial Advisory and Securities (India) Private Limited in its research note. Nomura is positive on rural demand into the rest of FY14F. This could be one silver lining for demand into the rest of FY14F. Even before the impact of the monsoon has been taken into account, rural consumption is holding up better than urban consumption Hindustan Unilever, Dabur, and Asian Paints all stated at their most recent conference calls that rural growth has held up much better than urban growth. Nomura expects this channel to remain one of the pockets of relative strength from a demand perspective this year.
According to Nomura, the consumer sector outperformed the Sensex in CY11 and CY12 by 32% and 23%, respectively. Even on an YTD (year-to-date) basis, consumer has outperformed the Sensex by 11.4%. Individual stocks outperformed the consumer sector, with ITC +14%/45% in CY11/12. Although Hindustan Unilever underperformed the FMCG index in CY12, it outperformed the Sensex by +53% in CY11/12. The performance of the FMCG index vis-a-vis the Sensex is given in the table below:
Nomura adds that the consumer sector equity performance is driven more expansion in price-earnings ratio than by tangible growth in earnings. Sector valuations are already at multi-year highs and are unlikely to go up further. Overall, Nomura expects the consumer sector to consolidate rather than have tremendous growth in the immediate future. ITC, Emami, Marico and Bata India are Nomura’s top picks for FY14F, concludes the research note on the equity market.
FMCG sector growth and GDP growth are expected to reflect one another and it is shown in the chart below:
According to Monster.com report, recruitment activity in many sectors witnessed a decline during August compared with July as companies continued to exercise a cautious approach amid economic uncertainties
Hiring activities across many sectors, including financial services and real estate, turned sluggish in August as companies continued to exercise a cautious approach amid economic uncertainties, says a report.
Job portal Monster.com said recruitment activity in many sectors witnessed a decline during August compared with July.
The sluggish trend is reflected in the Monster Employment Index a monthly gauge of hiring activities online, which slipped to 122 last month compared to 123 in July. In June, the same was at 131.
According to Monster.com, sectors that saw relatively less hiring activities include banking, financial services, insurance, real estate and telecom/ISP.
On an annual basis, the index slumped about three per cent last month compared to the reading of 126 recorded in August 2012.
“The decline in annual growth is reflective of the uncertain economic/political scenario. The employers are adopting a cautious approach in hiring due to prevailing challenging economic conditions which is reflected in the index,” said Sanjay Modi, managing director of Monster.com for India, Middle East and South East Asia.
Meanwhile, online recruitment activities rose in eight of the 13 geographies covered by the index. The rise was seen in Chandigarh (16%) and Ahmedabad (14%), among others.
About 150 Americans die every year by accidentally taking too much acetaminophen, the active ingredient in Tylenol. The toll does not have to be so high
During the last decade, more than 1,500 Americans died after accidentally taking too much of a drug renowned for its safety: acetaminophen, one of the nation’s most popular pain relievers.
Acetaminophen – the active ingredient in Tylenol – is considered safe when taken at recommended doses. Tens of millions of people use it weekly with no ill effect. But in larger amounts, especially in combination with alcohol, the drug can damage or even destroy the liver.
Davy Baumle, a slender 12-year-old who loved to ride his dirt bike through the woods of southern Illinois, died from acetaminophen poisoning. So did tiny five-month-old Brianna Hutto. So did Marcus Trunk, a strapping 23-year-old construction worker from Philadelphia.
The toll does not have to be so high.
The U.S. Food and Drug Administration has long been aware of studies showing the risks of acetaminophen – in particular, that the margin between the amount that helps and the amount that can cause serious harm is smaller than for other pain relievers. So, too, has McNeil Consumer Healthcare, the unit of Johnson & Johnson that has built Tylenol into a billion-dollar brand and the leader in acetaminophen sales.
Yet federal regulators have delayed or failed to adopt measures designed to reduce deaths and injuries from acetaminophen overdose, which the agency calls a “persistent, important public health problem.”
The FDA has repeatedly deferred decisions on consumer protections even when they were endorsed by the agency’s own advisory committees, records show.
In 1977, an expert panel convened by the FDA issued urgently worded advice, saying it was “obligatory” to put a warning on the drug’s label that it could cause “severe liver damage.” After much debate, the FDA added the warning 32 years later. The panel’s recommendation was part of a broader review to set safety rules for acetaminophen, which is still not finished.
Four years ago, another FDA panel backed a sweeping new set of proposals to bolster the safety of over-the-counter acetaminophen. The agency hasn’t implemented them. Just last month, the FDA blew through another deadline.
Regulators in other developed countries, from Great Britain to Switzerland to New Zealand, have limited how much acetaminophen consumers can buy at one time or required it to be sold only by pharmacies. The FDA has placed no such limits on the drug in the U.S. Instead, it has continued to debate basic safety questions, such as what the maximum recommended daily dose should be.
For its part, McNeil has taken steps to protect consumers, most notably by helping to fund the development of an antidote to acetaminophen poisoning that has saved many lives.
But over more than three decades, the company repeatedly fought against safety warnings, dosage restrictions and other measures meant to safeguard users of the drug, according to company memos, court records, documents obtained under the Freedom of Information Act, and interviews with hundreds of regulatory, corporate and medical officials.
In the 1990s, McNeil tried to create a safer version of acetaminophen, an effort dubbed Project Protect. But after the initiative failed, the company kept its experiments confidential, even when the FDA inquired about the feasibility of developing such a drug.
Later, McNeil opposed even a modest government campaign to educate the public about acetaminophen’s risks, in part because it would harm Tylenol sales.
All the while, it has marketed Tylenol’s safety. Tylenol was the pain reliever “hospitals use most,” one iconic ad said. The one “recommended by pediatricians,” said another. “Safe, fast pain relief,” its packages promised.
In written responses to questions for this story, as well as a pre-recorded statement by its vice president for medical affairs, McNeil said it has always acted to ensure its products were used safely.
“McNeil takes acetaminophen overdose very seriously, which is why we have taken significant steps over the years to mitigate the risk,” the company wrote. McNeil has engineered safety packaging and spent millions on research, education and poison control centers that advise people who have overdosed.
The company said that science on acetaminophen had evolved over time and that it had implemented safety measures accordingly. Most recently, it announced it will soon add red lettering to the caps of medicine bottles saying they contain acetaminophen and that users should read the label.
In several cases, after FDA advisors recommended the agency enact safety measures over McNeil’s objections, the company adopted them before the agency forced it to do so. The company then said it was taking such steps voluntarily. McNeil also stressed that it has always followed FDA regulations.
McNeil objected to the thrust of questions from ProPublica and This American Life, saying they indicated “a clear bias” in favor of plaintiff’s lawyers who are suing the company.
The company declined to answer questions about individual cases of death or injury.
“Our hearts go out to those who have suffered harm from acetaminophen overdose, and to the families of those who lost their lives as a result,” McNeil wrote in its statement.
FDA officials said the agency saw the benefits of keeping acetaminophen widely available as outweighing the “relatively rare” risk of liver damage or death. Some patients cannot tolerate drugs such as ibuprofen, and for them acetaminophen may be the best option, said one agency official.
The FDA has bolstered acetaminophen warnings as new science about the drug emerged, the agency said in a statement.
But FDA officials acknowledged the agency had moved sluggishly to address the mounting toll of liver damage caused by acetaminophen. They blamed changing research, small budgets, an overworked staff and a cumbersome process for changing rules for older drugs such as Tylenol slowing them down.
The agency has greater authority over prescription drugs, and it has already slapped medications containing acetaminophen with a “black box warning” that says overdosing can lead to “liver transplant and death.” Paradoxically, the same medicine sold over the counter does not tell patients that death is a possible side effect.
“Among over-the-counter medicines, it’s among our top priorities,” said Dr. Sandy Kweder, one of the FDA’s top experts on acetaminophen. “It just takes time.”
Many doctors believe in acetaminophen and some medical associations advise patients to take it for mild to moderate pain or reducing fever. “Given the number of doses given annually, the track record is incredibly safe,” said Dr. Bill Banner, a pediatrician and the medical director of the Oklahoma Poison Control Center.
Every over-the-counter pain reliever can cause harm. Even without overdosing, aspirin and ibuprofen can lead to stomach bleeding. In extremely rare cases, according to the FDA, recommended doses of ibuprofen and acetaminophen can provoke a skin reaction that can kill.
But the FDA says acetaminophen carries a special risk. About a quarter of Americans routinely take more over-the-counter pain relief pills of all kinds than they are supposed to, surveys show. That behavior is "particularly troublesome" for acetaminophen, an FDA report said, because the drug's narrow safety margin places "a large fraction of users close to a toxic dose in the ordinary course of use.”
The FDA sets the maximum recommended daily dose of acetaminophen at 4 grams, or eight extra strength acetaminophen tablets. That maximum applies to both over-the-counter and prescription drugs with acetaminophen.
Taken over several days, as little as 25 percent above the maximum daily dose – or just two additional extra strength pills a day – has been reported to cause liver damage, according to the agency. Taken all at once, a little less than four times the maximum daily dose can cause death. A comparable figure doesn't exist for ibuprofen, because so few people have died from overdosing on that drug.
About as many Americans take ibuprofen as take acetaminophen, according to consumer surveys from the mid-2000s.
The U.S. Centers for Disease Control and Prevention and the American Association of Poison Control Centers collect data on the number of deaths associated with each drug, but the figures are incomplete, making comparisons subject to question. McNeil contends the databases do not contain the information needed to draw conclusions about the relative risks of different medicines. The company and some epidemiologists maintain that these data sets undercount deaths resulting from chronic use of naproxen, ibuprofen and similar pain relievers. (More on the numbers can be found here.)
Still, the data show that acetaminophen is linked to more deaths than any other over-the-counter pain reliever.
From 2001 to 2010, annual acetaminophen-related deaths amounted to about twice the number attributed to all other over-the-counter pain relievers combined, according to the poison control data.
In 2010, only 15 deaths were reported for the entire class of pain relievers, both prescription and over-the-counter, that includes ibuprofen, data from the CDC shows.
That same year, 321 people died from acetaminophen toxicity, according to CDC data. More than half – 166 – died from accidental overdoses. The rest overdosed deliberately or their intent was unclear. For the decade 2001 through 2010, the data shows, 1,567 people died from inadvertently taking too much of the drug.
Acetaminophen overdose sends as many as 78,000 Americans to the emergency room annually and results in 33,000 hospitalizations a year, federal data shows.
Acetaminophen is also the nation’s leading cause of acute liver failure, according to data from an ongoing study funded by the National Institutes for Health.
Behind these statistics are families upended and traumatized and, in the worst cases, shattered by loss.
Just before Christmas 1999, 12-year-old Davy Baumle came down with a sore throat. For a week, his parents, David and Udosha Baumle, gave him Maximum Strength Tylenol Sore Throat, measuring out doses of the thick syrup.
But instead of getting better, Davy became listless. On Christmas Day, he threw up blood. His father took him to a local emergency room wrapped in a fuzzy brown blanket. A few days later, the boy was declared brain dead.
The Baumles later sued McNeil, claiming the company had failed to warn consumers of its product’s lethal danger. At trial, they testified they never gave Davy more than the recommended dose, 4 grams per day, or eight tablespoons. An expert for the company testified that lab work suggested the boy had ingested more, 6 to 10 grams, over several days.
The difference amounted to as little as 4 tablespoons a day, but the company prevailed, persuading the jury that the Baumles had not used Tylenol precisely as specified.
David Baumle said he would never have given his son the drug if he knew it was potentially lethal. At the time, the label simply warned of “serious health consequences” in case of overdose.
“They tell you it’s medicine,” he said. “They don’t tell you it can kill you.”
Tylenol was born in 1955, when the family-owned McNeil Laboratories introduced a liquid for children called Tylenol Elixir.
The drug’s key ingredient, acetaminophen, was developed in the late 1800s in Germany’s coal tar industry. McNeil seized on the drug’s potential after American research suggested that the medication does not cause stomach bleeding, as aspirin can. McNeil named the product based on letters in the chemical term for acetaminophen, N-acetyl-p-aminophenol.
Johnson & Johnson acquired McNeil in 1959, the same year that Tylenol was approved for over-the-counter sales. Soon thereafter, the first adult version of Tylenol rolled off the company’s production line in Fort Washington, Pa., the site of McNeil’s current headquarters.
Unlike companies that develop prescription drugs, McNeil has no patent on acetaminophen, and so no right to sell it exclusively. Virtually every drug store stocks generic acetaminophen, usually on the same shelf as Tylenol. To sell Tylenol at a premium, the company had to persuade customers they were getting extra value.
Tylenol has had “generic competition for 40 years,” said Ashley McEvoy, then the president of McNeil, in a webcast interview posted in 2008. “If I look back at what’s garnered success for McNeil, it’s the enduring value of brands.”
The company aimed its early sales pitches at doctors, according to a company history, working to persuade them to recommend Tylenol as a safer alternative to aspirin. To this day, the company’s formula for success hinges on positioning Tylenol as safer than other painkillers and more trustworthy than generics.
Perhaps the most famous chapter in McNeil’s corporate history is its response when several people in the Chicago area died in 1982 after taking Tylenol laced with cyanide.
The mysterious deaths terrorized the country — and raised questions about the safety of the company’s products. But in what later became a business school case study, McNeil removed Tylenol from the market, offered refunds and eventually developed tamper-resistant pills. By the end, it had transformed a disaster into a public relations coup.
McNeil’s marketing campaigns for its master brand were also skillful, burnishing Tylenol’s image while usually avoiding claims of absolute safety or zero side effects. One slogan: “The brand of pain reliever that doctors recommend more than any other.” Another: “Trust TYLENOL. Hospitals do.”
“We never use the word ‘safe’ in our advertising,” said Anthony Temple, McNeil’s longtime medical director, in a legal case in 1993. “We will say ‘a superior safety profile’ or some language to suggest its relative safety to other” over-the-counter pain relievers.
McNeil’s advertising budget for Tylenol has frequently exceeded $100 million per year: $115 million in 2003, according to Brandweek; $138 million in 2005, according to Advertising Age; and $162 million in 2008, according to Adweek. In 2004, marketing was the largest department in the company, employing about 150 professionals, McEvoy said in a court deposition.
McNeil’s recent chief executives have often come from marketing backgrounds. Johnson & Johnson, a conglomerate of more than 250 companies, does not even place McNeil into its pharmaceutical division, which is responsible for prescription drug products. Instead, the company is part of the consumer division, along with shampoo, mouthwash and skin care products.
Johnson & Johnson does not release sales figures for individual products, but Tylenol is the dominant acetaminophen brand in the U.S. Although the drug is available in cheaper generic forms, McNeil accounted for nearly half of all over-the-counter sales of acetaminophen, according to a 2010 McNeil presentation.
Sales of acetaminophen by all companies have also grown. It became the nation’s most-used drug in the mid-2000s, according to surveys. In 2009, more than 27 billion doses of acetaminophen were sold in the U.S., most over the counter.
One way McNeil has reached ever-more households is through a marketing strategy known as line extension: targeting market niches by adding products, all under the halo of the Tylenol brand. Between 1988 and 2002, the company notified the FDA of plans to introduce 54 different kinds of packages, ranging from chewable tablets to coated pills, packed into bottles, pouches, cartons and blister packs.
In the webcast interview, McEvoy, a marketing expert who rose into Johnson & Johnson’s corporate ranks, called Tylenol “a billion-dollar brand.”
Internally, company officials refer to it simply as “the Brand.”