Question-and-Answer Session
Operator
(Operator Instructions) The first question comes from the line of David Buck – Buckingham Research.
David Buck – Buckingham Research
First on Consumer Health can you talk about the level that you assumed in your guidance of price degradation if any and specifically on Omeprazole? Your competitor made a comment that pricing may not go down very much and expected a long-term free player market. I would just be interested in your comments there. Also in the guidance what are the assumptions for foreign currency and did the Rx numbers for the fourth quarter have any milestones included?
Joe Papa
Just a clarification before I answer the question were you asking specifically about the Omeprazole pricing or the overall CHC pricing?
David Buck
Both.
Joe Papa
I will start first and then Judy can talk about the foreign exchange portion of the question. First of all on the CHC pricing we expect CHC pricing flat to up slightly. As we look at the overall CHC pricing it was previously coming down. We now expect to flatten out that pricing so essentially the pricing will be a flat environment. Potentially up slightly but flat is our expectation for where we are going on pricing for CHC.
Specific to Omeprazole, it is clear we do expect to face pricing competition in incremental competition for Omeprazole from the competition. However, as we look at it we also want to be clear we think we will gain incremental market penetration of the private label, store brand Omeprazole product. So some pricing but also some incremental gains in market share penetration. As we netted those out we felt that as we looked at Omeprazole specifically our pricing environment we felt that it would be reasonably flat during the course of fiscal year 2010.
Now clearly your point is that we do expect pricing erosion on Omeprazole is absolutely correct. The second part of the question Judy was a foreign exchange part of the question.
Judy Brown
In terms of our assumption for the 2010 plan when we look at our planning process what we typically do is utilize an exchange rate assumption for the upcoming fiscal year in line with the current rate. As you know, rates have stabilized versus the volatility that was going on in the September through February period. Right now we are utilizing rates and expectations of translation rates and transaction rates in our plan as today’s rate.
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