The 3rd quarter of 2012 was not so great for chemical, pharma firms

From this week's C&EN, I see storm clouds brewing. From Melody Bomgardner, 3rd quarter earnings for chemical companies were not looking so great:

Against the backdrop of a slowly strengthening U.S. economy, chemical firms saw earnings slide again in the third quarter, in large part because of rapidly declining prices. Out of 21 firms tracked by C&EN, Dow Chemical, DuPont, and eight other companies reported lower sales and earnings in the quarter compared with last year. 

The results prompted promises by chief executive officers to heighten the cost-cutting moves they have been implementing throughout the postrecession recovery. As they announced financial results, Dow CEO Andrew N. Liveris and DuPont CEO Ellen J. Kullman unveiled additional restructuring plans, including layoffs, to be implemented in the fourth quarter and beyond (C&EN, Oct. 29, page 7). Then, one week after Dow’s Oct. 23 announcement, the company amended its tally of layoffs, saying it will cut 3,000 positions in the next two years, an increase of 600 from the original statement and equal to 6.3% of the firm’s workforce.

From Ann Thayer, same thing goes for the pharma companies:

For the third consecutive quarter, no relief came as combined sales and earnings declined at the major pharma companies tracked by C&EN. Overall, quarterly sales fell 5.0%, and earnings for the companies that reported them dropped 9.1%. For the first nine months of the year, sales were down 3.0%, while earnings declined 5.4%. By comparison, in the first half of 2012, sales slipped just 2.1% and earnings were down 3.5%. 

Four companies reported double-digit drops in sales, and five had similar-sized slides in earnings. Hardest hit was Bristol-Myers Squibb. Its third-quarter sales plummeted 30.1% to $3.7 billion, and earnings dropped by an even larger 34.3% to $685 million. U.S. patents expired in March on its high blood pressure drug Avapro and in May on the blood thinner Plavix. Excluding these two products, the company’s sales were up 7% compared with the third quarter of 2011.

Does anyone foresee another round of layoffs from Big Pharma? By now, I can't see how they could cut more (he said naively.)

Why does ACS Publications increase its journal prices?

From this week's C&EN, a long and interesting article by Lila Guterman about ACS Publications and its customers (mostly university librarians) who are pretty unhappy with ACS' price increases:

Jenica P. Rogers, director of libraries at the State University of New York, Potsdam, said the price of ACS’s all-journals electronic licensing package would have consumed more than 10% of her 2013 acquisitions budget. It was, she said, outside the range of what her small university could afford. Her blog posting received more than 100 responses in comments, Listserv postings, and blog posts by other librarians. In October, Rogers posted on her blog that other librarians had told her they intend to cancel as well. ACS says it has seen no uptick in cancellations in recent years. [snip] 

...ACS’s price increases in recent years, [ACS Pubs President] Crawford says, have been “well within scientific publishing industry norms.” For its all-journals package, the increases in both 2010 and 2011 were 7%; in 2012, the increase was 6%; and in 2013, it will be 5%—except for smaller academic institutions and community colleges, which will see no price increase. These price increases include the seven new journals ACS has introduced since 2010. However, customers seeking relief had the option to decline the new titles and, as a result, would have seen smaller increases of 5% in 2010 and 2011, and 4% in 2012. No new-title increment was added to the 2013 subscription fees. 

Explaining the yearly increases, Crawford says, “Manuscript submissions for consideration continue to rise at double-digit rates, and our published article output increases upward of 5% annually, with concomitant costs.”

If you read further in the article, you'll see that instead of charging a flat fee, ACS Publications charges you a rate based on your usage level (among other things). The more you use, the higher the fee apparently. If you read the whole thing, you'll see that ACS proposed to one small college an 1,800% increase in fees, that seemed to have gotten bargained down to a series of increases in a year (that included a 70% increase for the 2012-2013 year.)

Does anyone have a good answer as to why they do this (other than "because they can?") It seems apparent to me that they're burning up a lot of good will on the part of professors and librarians (not that anyone in DC cares about that, apparently.) I would expect this sort of behavior from Comcast, not a titular non-profit.

[2nd question: does anyone know something prominent at ACS that's funded substantially by ACS Publications? Like maybe there's a $30 million picnic for sick kids that takes up all of ACS Pubs' profits -- yeah, that's the ticket...]

C&EN on flame retardants

This week in C&EN, a great set of articles on (drumroll) flame retardants. It makes for some pretty interesting reading, especially William Schulz's profile of Dr. Arlene Blum, one of the most prominent activists (and chemists -- she did her doctorate with Bruce Ames) against brominated flame retardants:

Fire-safety experts and other people who oppose Blum’s campaign—and who have called for a more reasoned analysis of the fire-safety science on flame retardants—say she brushes them aside as disqualified to provide expert opinion because of current, previous, or inconsequential chemical industry ties. They say Blum and her supporters shout them down at public workshops or refuse to engage in dialogue over the issues and the science. Worse, they say, Blum is promoting false information about fire safety from flame retardants via a high-visibility media campaign that stokes fear of chemicals that have been used for decades and have saved the lives of tens of thousands of people in the U.S. who have been the victims of home fires... 

[snip] Blum and other scientists insist that a growing body of evidence indicates that the brominated flame-retardant chemicals used in upholstered furniture may, in some cases, be endocrine disrupters or have neurological and other health effects that make them unacceptable for use in everyday objects like sofas and chairs. Such flame retardants, she says, tend to accumulate in tissues and have been detected in the blood of adults and children. 

“There are some 3,700 peer-reviewed papers on flame-retardant chemicals’ toxicity,” Blum says emphatically. Children especially, she says, should have very limited—if any—exposure to compounds that might damage their physical and intellectual development or leave them more vulnerable to other chronic health problems...

[snip] When asked if there could be differing interpretations of what is a large and complex body of data on the efficacy of flame retardants, Blum snaps, “I am not a fire scientist. This is such a broad field. There are about 10 disciplines involved.” 

Blum says that other ways to prevent deaths from upholstered-furniture fires—improved building codes, reduced cigarette smoking, and increased use of sprinkler systems, for example— undermine the case for using flame-retardant chemicals.

Similar to Dr. Blum, I don't really fully understand all the fire science behind flame retardants. Certainly, it would seem that both cigarette smoking and fire incidents are being statistically reduced over time, and that maybe flame retardant use could follow. It also doesn't help the situation when the chemical industry has resorted to less-than-honest tactics when promoting flame retardants.

However, I'm less than convinced by the evidence of toxicity (I would say that, wouldn't I?). But that hasn't stopped activists from making bold claims about neurotoxicity of flame retardants or making suggestions that sound like terrible tradeoffs (from Cheryl Hogue's article on EPA's approach to BFRs):

“Alternatives abound,” says Kathleen A. Curtis, national coordinator for the Alliance for Toxic-Free Fire Safety. The group is a coalition of activists who support techniques to reduce or eliminate the need to add flame-retardant compounds to products. Alternatives include increased use of sprinklers and smoke detectors, fire-safe cigarettes, and hiring more firefighters, she says. Improvements in product design are also an option, such as use of inherently fire-resistant materials—nonwoven polyester fibers, for example—or barriers between highly flammable materials such as foams and the outer fabric coverings of furniture, Curtis tells C&EN.

Urrrr? That sounds quite expensive, and unlikely to happen (what's the likelihood over the next 20 years that we (as a country) are going to be hiring more, as opposed to less firefighters?)

Readers, been igniting your couches recently? What are your thoughts on flame retardants?