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Perrigo puts medicine within reach

By
Kelly Dawson
April 4, 2018
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There are more than 250 companies in our combined portfolios, and they are all making amazing advancements. From names you know, like Tesla, to those little gems you haven’t heard of yet, like Xylem, we want you to know all about what your holdings are up to. These ‘deep dives’ will help you understand what you’re invested into and how your dollars are making the world a better place.

The Perrigo Company is part of our Disease Eradication portfolio.

  • The Perrigo Company is the leading over-the-counter, private-label pharmaceutical company in the world
  • Luther Perrigo began the company in 1887 to sell packaged medicines alongside housewares
  • Perrigo has a current market capitalization listed at $12 billion and sales of nearly $6 billion  

Picture yourself at your local drugstore. Fluorescent lights are reflecting off the shiny linoleum floors as universally appealing Top 40 songs play over the organized aisles. You pick up a few things — shampoo, floss, a candy bar — and drag your feet over to the medicine section. That runny nose and itchy throat you’ve been dealing with may have been easier to ignore yesterday, but today is different: You’ve accepted that you need back up.

So, after checking the labels of a few boxes, you’re satisfied with your selection and go to pay. Easy, right? This setting is pretty routine, so much so that the Consumer Healthcare Products Association (CHPA) estimates that there are almost 3 billion trips of its kind in America every year, more than visiting a doctor’s office. But let’s take a step back. The stocked medicine aisles of a standard drugstore, and the brands that have garnered our trust, have given us the autonomy to care for ourselves without a co-pay. In fact, over-the-counter drugs have become so ubiquitous, for good and bad, that we no longer bat an eye at the types of ailments that may have panicked past generations. How did these pills and liquids come to be, and what machinery was put in place to make a dependable assembly line out of medication?

The Perrigo Company is partially responsible for making such medicinals mundane, as it is the leading over-the-counter, private-label pharmaceutical company in the world. Chances are, if you’ve popped a generic cold, allergy, or even antacid pill lately, Perrigo had something to do with it.

With its incorporation headquarters in Dublin and about 12,000 worldwide employees, Perrigo manufactures generic drugs, active pharmaceutical ingredients, and common household items (like toiletries) for sale across much of the world. The markets that receive the most attention include Europe, Australia, Israel, China, Mexico, India, and the United States. We’re going to focus primarily on the U.S. market for this story.

Because of what Perrigo and likeminded businesses do, 60 million ailing Americans who say they wouldn’t seek out a solution otherwise get the care they need. And while we all take it lightly, since we can also grab some candy and listen to a favorite 90s song in the process, getting over-the-counter drugs whenever we need them is its own type of modern success. Because when we have the budgetary means to stay healthy, most of us do.

A spoonful of sugar

In records compiled by the Center of Disease Control and Prevention, the leading cause of death one hundred years ago was pneumonia and influenza. These illnesses are still nothing to sneeze at, especially during this current flu season, but here’s some perspective: According to this year’s rankings, those same two illnesses have dropped from first to eighth.

There a lot of reasons why this shift has occurred, from advances in available treatments to the rise of environmental and modern triggers for other ailments, such as the connection between an unhealthy diet and the nation’s current leading cause of death, heart disease. But one reason we’ve seen mortality rates fall around the flu and the common cold is because of access to dependable medications, appropriate dosages, and overall safe use (for instance, not giving kids the same amount as adults).

The Perrigo Company has seen this rise in home medical care for itself, when it began as a simple general store and apple-drying outpost in small-town Michigan. It was 1887, and the namesake owner, Luther Perrigo used his store to sell packaged medicines alongside housewares. Individually packaging homemade medicines was a novel idea at the time, and a good one at that: It was perfectly timed with the invention of aspirin in 1899. By then, Perrigo had his own trustworthy concoctions, and his son Harry has a full-fledged business to take over when his father died at the turn of the century. The company moved to Allegan, Michigan, where its executive headquarters is still located, soon after. And by the 1920s, it had a factory, testing lab, and customer base throughout the Midwest.

But the factory wasn’t the only reason why Perrigo is still a name associated with medications. Before the founding Perrigo died, he’d been working on a “private label” endeavor that printed the store’s name on items customers purchased, like the bottles of epsom salts, for free. This led to his company signing with a large customer who wanted their own private label in the 1930s. From there, Perrigo moved from re-packaging simple home remedies to eventually creating a manufacturing business under private labels.

In the ensuing years, the company’s arsenal grew as you might expect: a private-label plant opened in the midst of the Great Depression, healthcare products like throat medicine entered the labs in the 1940s, and more factories were built in the mid-century. And by the time Perrigo was making millions of aspirins and other medicines every year, acquisitions took over.

We’ll spare you the complicated ins and outs of the period that stretches from the 1980s to now, since Perrigo purchased and was purchased by a list of other entities over many years, and cut to the chase. These days, Perrigo divides its businesses over four segments: branded consumer healthcare, consumer healthcare, prescription pharmaceuticals, and specialty sciences (this segment mainly focuses on treatment for multiple sclerosis). It estimates that about 1,500 people use a Perrigo-made product every second — thanks to its 50 billion pills and 2 billion liquids produced every year — and others can find its workings in other creams, lotions, baby formulas, cosmetics, and vitamins around their homes, too. In all, Perrigo has a current market capitalization listed at $12 billion and sales of nearly $6 billion.  

Jagged little pill

All of us who’ve been on a drugstore run can attest to the convenience of over-the-counter medication when used correctly. The aforementioned CHPA noted that Americans who shelled out $44 billion for over-the-counter drugs in 2014 saved the healthcare system $102 billion in doctor visits, prescription drugs, and further testing. And Perrigo agrees, claiming that it saves American consumers $5 billion a year when they choose its generic products.

But again, this comes down to more than just saving some money. By CHPA’s findings, over-the-counter medications have allowed Americans to treat minor issues with ease, which lessens the burden those discomforts may have had on their everyday lives.

When the namesake founder started this business, he was looking for the same level of convenience. He wanted a way to provide his rural neighbors with the tools they needed to make their homes into havens. While we may not be behind the scenes to see how Perrigo currently lives up to that plan — like in figuring out generic alternatives in labs or distribution processes around the world — we are exactly where Perrigo wants us to be: in drugstore aisles, getting the care we need whenever it arises.

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