Make us your home page
Instagram

Drug industry cutting workers

TRENTON, N.J. — Drugmakers — beset by growing generic competition, few new blockbusters, drug safety concerns and pressure from insurers and government health programs to discount prices — are cutting tens of thousands of jobs.

Nearly all of the country's 10 largest pharmaceutical companies in the U.S. are restructuring, with some, such as Schering-Plough Corp., announcing plans to trim 10 percent or more of the work force.

Since 2007, eight of the world's biggest drugmakers have eliminated more than 42,000 jobs; two other major companies have eliminated another 12,200 jobs in the last few years.

"There are a lot of things going on making this the perfect storm for the industry," said Argus Research health care analyst Martha Freitag. "My sense is maybe we're halfway through" the cost cutting.

Today's struggles come after the industry's golden era in the 1990s, when a slew of new drugs quickly became blockbusters, fueling almost routine double-digit quarterly profit increases and rising stock prices and dividends.

"They're being hurt by their own past enormous success," Freitag said.

The blockbusters of the 1990s have nearly all been replaced with generics, and pharmaceutical companies are finding it harder to come up with new drugs — 53 were approved in 1997, but only 16 last year.

More recently, generic drug companies have been increasingly filing — and winning — legal patent challenges, bringing generic competitors to market years before they were expected and cutting into drugmaker profits that much earlier. For some big pharmaceutical companies, that's meant billions in sales suddenly evaporating overnight, rather than over months, as prescription plans quickly switch patients to generics.

Analysts predict that 2011 and 2012 will be particularly rough. Brand-name drugs totaling $40-billion in sales — including the world's top-selling medicine, Pfizer Inc.'s cholesterol-fighter Lipitor — lose patent protection then. Some drugmakers already are restructuring in anticipation of that.

Meanwhile, federal regulators have increased scrutiny — and rejection — of experimental drugs, and have restricted the use of some existing ones due to safety problems. Safety concerns also have forced some drugs off the market or scared away patients.

Drug industry cutting workers 04/04/08 [Last modified: Monday, April 7, 2008 12:14pm]
Photo reprints | Article reprints

    

Join the discussion: Click to view comments, add yours

Loading...
  1. 'Road to Nowhere' is back: Next phase of Suncoast Parkway coming

    Roads

    Despite intense public opposition and dubious traffic projections, the Florida Department of Transportation has announced that construction of the toll road known as "Suncoast 2" is expected to start in early 2018.

    The Suncoast Parkway ends at U.S. 98 just south of Citrus County. For years residents have opposed extending the toll road, a project dubbed the "Suncoast 2" into Citrus County. But state officials recently announced that the Suncoast 2 should start construction in early 2018. [Stephen J. Coddington  |  TIMES]
  2. A sports rout on Wall Street

    Retail

    NEW YORK — Sporting goods retailers can't shake their losing streak.

  3. Grocery chain Aldi hosting hiring event in Brandon Aug. 24

    Retail

    BRANDON — German grocery chain Aldi is holding a hiring event for its Brandon store Aug. 24. It is looking to fill store associate, shift manager and manager trainee positions.

  4. Lightning owner Jeff Vinik backs film company pursuing global blockbusters

    Corporate

    TAMPA — Jeff Vinik's latest investment might be coming to a theater near you.

    Jeff Vinik, Tampa Bay Lightning owner, invested in a new movie company looking to appeal to a global audience. | [Times file photo]
  5. Trigaux: Look to new Inc. 5000 rankings for Tampa Bay's future heavyweights

    Business

    There's a whole lotta fast-growing private companies here in Tampa Bay. Odds are good you have not heard of most of them.

    Yet.

    Kyle Taylor, CEO and founder of The Penny Hoarder, fills a glass for his employees this past Wednesday as the young St. Petersburg personal advice business celebrates its landing at No. 25 on the 2017 Inc. 5000 list of the fastest growing private companies in the country. Taylor, still in his 20s, wins kudos from executive editor Alexis Grant for keeping the firm's culture innovative. The business ranked No. 32 last year. [DIRK SHADD   |   Times]