Novartis announces massive US jobs cuts
New York, January 13, 2012
Novartis AG is slashing nearly 2,000 jobs in the US ahead of the patent loss of its top-selling blood pressure drug Diovan, the Swiss drugmaker said on Friday, just months after it said would scale back operations in Switzerland.
The group is also expected to take a one-off charge of $900 million in the fourth quarter after stopping a study of Rasilez, also known as Tekturna, to treat high-risk patients with type-2 diabetes and renal impairment.
'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,' David Epstein, the group's pharma chief said in a statement.
The group anticipates the restructuring measures, which will result in a charge of $160 million in the first quarter of 2012, will lead to annual savings of around $450 million by 2013.
The changes are expected to take place in the second quarter of this year, the group said.
Novartis' latest round of job cuts comes just months after it said it was cutting 2,000 jobs in Switzerland and the United States to keep costs under control in the face of growing price pressures.
The Basel-based group has already cut thousands of jobs and shut several sites, notably in Britain. It has also shifted its focus to specialty medicines in a bid to boost profitability and protect its bottom line.
Global drugmakers have cut tens of thousands of jobs ahead of patent expirations on their top-selling products, while a growing squeeze on medicine prices by cash-strapped governments is adding to the pressure to cut costs.-Reuters