Report: J&J plans layoffs, revamp to jumpstart diabetes arm

Johnson & Johnson ($JNJ) will lay off a number of employees as part of a plan to revamp its diabetes arm, driven by ongoing challenges facing the broader industry sector.

David Detmers, director of communications for J&J's diabetes solutions business, told MassDevice that the cuts are part of an overall response to continued pricing and reimbursement pressures faced by the division.

The company isn't specifying how many jobs will be cut. But MassDevice reported that the cuts and changes would, in part, directly affect the LifeScan unit, which makes blood glucose monitoring systems for both the hospital and home. According to the story, the revamp will include moving one sales unit from the LifeScan arm to the company's Janssen wing, which handles pharmaceutical sales. Also, executives aim to consolidate two facilities in California as part of the broader effort.

As MassDevice reported, J&J's diabetes device sales have dropped by double digits this year, something that the company attributes to new competitive bidding rules the Centers for Medicare & Medicaid Services put in place.

J&J's LifeScan is not without problems. Earlier this year the FDA slapped a Class I label on the company's recall of three LifeScan glucose meters, which had been hampered by software snafus.

But other companies focused on the diabetes med tech industry face similar challenges and struggles over pricing and reimbursement. Roche ($RHHBY), for example, was reported in May as exploring a possible sale of its blood glucose meter business because of the struggles the division has continued to face. Roche has slashed jobs in the division and pursued a restructuring in a bid to address slumping diabetes sales.

- read the MassDevice story

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