Novartis Plans to Cut 1,400 Drug Sales Jobs in U.S.; Cost Is $85 Million
Novartis AG plans to cut 1,400 sales jobs in the U.S. as the drugmaker prepares for patent expirations and product introductions.
The reductions will result in a one-time cost of about $85 million, the Basel, Switzerland-based company said in a statement today. The cuts don’t affect the sales forces for cancer treatments or the Sandoz generic-drug unit, said Anna Frable, a company spokeswoman.
Novartis Chief Executive Officer Joseph Jimenez told investors this month that the company would review sales and manufacturing to cut costs. Crosstown rival Roche Holding AG said this month it would eliminate 4,800 jobs to offset pressures on drug prices and setbacks in drug development.
“The future growth potential for our organization remains strong,” said Andy Wyss, president of Novartis Pharmaceuticals Corp., the parent’s U.S. unit, in the statement. The reductions “will enable us to focus our resources on key launch products and capture opportunities in both primary care and specialty medicines.”
The drugs sold by the East Hanover, New Jersey-based unit are changing as patents expire and new products come to market, according to the statement. The company’s best-selling drug, Diovan for hypertension, starts to lose U.S. patent protection in 2012. In September, U.S. regulators approved Gilenya, a multiple sclerosis pill that the company says may bring in billions of dollars annually.
Novartis fell 80 centimes, or 1.5 percent, to 53.25 Swiss francs at the 5:30 p.m. close of trading in Zurich, giving the company a market value of 140.5 billion francs ($140.7 billion). The stock has declined 2.4 percent this year, including reinvested dividends, compared with a 6.3 percent return for the Bloomberg Europe Pharmaceutical Index.
Jimenez, presenting the company’s strategy to analysts and investors on Nov. 17 in London, said cost savings will be invested in drug development and faster-growing emerging markets such as China, Russia, Brazil and India.
The company employed about 99,800 people at the end of last year.
Novartis is testing 142 drugs in human trials, and plans to have submitted eight experimental drugs for regulatory approval by the end of this year, the company said on Nov. 17.
To contact the editor responsible for this story: Phil Serafino at firstname.lastname@example.org