The pharmaceutical (pharma) industry, once a thriving sector, has been cutting costs right and left by closing plants, laying off people, outsourcing jobs to third-world countries, and reducing research efforts to the minimum.
The good old days of the pharmaceutical industry are gone forever. Even an improved global economic climate is unlikely to halt efforts by the developed worlds governments to contain spending on drugs, according to a December McKinsey Quarterly report, a business journal published by McKinsey & Company.
Despite a strong third quarter financial performance, Novartis International AG, a Swiss-based pharmaceutical giant, announced that it is closing down three of its subsidiaries, resulting in the layoff of 2,000 people. About 35 percent of the jobs will be outsourced to China and India, according to a conference call.
Novartis is announcing additional cost reduction activity, which will be uted over three to five years â¦ resulting in closure of two sites in Switzerland and one in Italy. â¦ In total, approximately 2,000 positions will be reduced in the Group â¦ mostly in Switzerland and the US offset by 700 new positions in low cost and other countries, according to a Novartis press release.
During the third quarter, net sales had increased by 18 percent to $14.8 billion compared to the same time period in 2010. Net income increased by 7 percent to $2.5 billion.