Sat, Jan 14, 2012 - Page 11 News List

Novartis plans to axe 2,000 US jobs

Reuters, ZURICH, SWITZERLAND

Novartis AG plans to axe nearly 2,000 of its US workforce ahead of the patent loss of top-selling blood pressure drug Diovan and it plans to take a US$900 million charge after another of its key drugs failed to live up to expectations.

Novartis is the latest in a long line of global drugmakers to cut its sales force as the industry faces its biggest wave of patent expiries ever.

The Swiss firm’s news comes just weeks after AstraZeneca said it was slashing nearly a quarter of its US sales force in a second round of job cuts in as many months, while Sanofi has also said it is cutting back on its sales force in the US.

Novartis plans to shed 1,630 jobs in the US and another 330 positions are expected to go as it reorganizes the headquarters of its US general medicines business. The changes are expected to take place in the second quarter of this year.

Diovan, which brings in US$6 billion a year, went off patent in Europe last year and it will lose exclusivity in the US in September. Japan follows next year.

The Basel-based group expects the restructuring measures, which will result in a one-off charge of US$160 million in the first quarter of the year, to claw back annual savings of about US$450 million by next year.

Novartis’ latest round of redundancies comes only a few months after it said it was cutting 2,000 jobs in Switzerland and the US to keep costs under control in the face of growing price pressures.

The company has already cut thousands of jobs and shut several sites, notably in Britain. In 2010, it said it was cutting 1,400 jobs in the US as it focused increasingly on specialty medicines to boost profitability.

“We recognize that the next two years will be challenging in the pharmaceuticals division and we are proactively making these changes to further focus our pipeline on the best opportunities,” pharmaceuticals chief David Epstein said in a statement.

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