Dec. 11 (Bloomberg) -- Novartis AG, Switzerland's largest drugmaker, will cut more jobs and eliminate some management posts because of rising competition and more tougher regulation of the pharmaceuticals industry.

The maker of the Diovan heart medicine will reduce the number of management levels and reevaluate the use of outside companies to conduct drug tests, spokesman John Gilardi said in an interview today. The Wall Street Journal reported the changes earlier today, citing Chief Executive Officer Daniel Vasella.

The moves follow a round of job cuts announced by the Basel- based company in October. Novartis has struggled this year with the delay of the potentially best-selling diabetes medicine Galvus, the withdrawal of its irritable bowel treatment Zelnorm, and the failure the win approval for the Prexige painkiller.

``They could be getting rid of a manufacturing site or a research site, and there's the whole Prexige sales force you could lose,'' said Nick Turner, an analyst at Mirabaud Securities in London. ``We know 2008 is going to be a dismal year. This may just point to how good the rebound is going to be in 2009, 2010 and 2011.''

Novartis dropped 40 centimes, or 0.6 percent, to 64.4 Swiss francs in Zurich. The shares have fallen 8.3 percent this year, making the stock the third-worst performer in the Bloomberg European Pharmaceuticals Index, which has declined 9 percent.

The Swiss company isn't the only drugmaker making changes after delays to new products. In July, London-based AstraZeneca Plc announced plans to reduce its workforce by about 11 percent. Pfizer Inc., the world's biggest drugmaker, is cutting 10,000 positions as older products lose sales to generic competition. London-based GlaxoSmithKline Plc is cutting jobs in sales, manufacturing and research to save 700 million pounds ($1.44 billion).

To contact the reporter on this story: Eva von Schaper in Munich at evonschaper@bloomberg.net.

Last Updated: December 11, 2007 11:58 EST