Pfizer to cut 10000 jobs, close plants

Pfizer, struggling with fierce competition from makers of generic drugs, announced it will cut 10,000 jobs and close at least five facilities as part of an effort to slash its annual costs by up to $2 billion by the end of next year. The drastic measures by the world's largest drug maker highlight the challenges faced by many pharmaceutical companies recently. In addition to patent expirations, big drug companies are facing a business climate where insurers and other large purchasers of medicines are demanding lower prices and more evidence of products' worth.

It's the second time in two years the maker of Viagra and Lipitor has announced a major cost-reduction plan to combat the loss of about $14 billion in revenues from 2005 to 2007 due to expiring patents. The company is at risk of losing 41% of its sales to generic competition between 2010 and 2012, including the revenue from its top seller Lipitor, according to Prudential analyst Tim Anderson.

Pressure on Pfizer has intensified since safety issues forced it to halt development of the star drug in its pipeline, which was slated to replace Lipitor as it loses patent protection as early as 2010. Pfizer's own labs haven't been very productive and the company hasn't introduced a blockbuster since it discovered Viagra in 1998.

(2007-01-28 15:32:55 SGT) [Biz] Permalink

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