Novartis To Slash Sales And Marketing
4 CommentsBy Ed Silverman // September 16th, 2007 // 11:19 am
The drugmaker continues to seek $400 million in savings from its pharma business as part of the $1 billion cuts already announced, the Swiss newspaper SonntagsZeitung reported, according to Thomson Financial. *
The newspaper said Novartis’s head of pharmaceuticals, Thomas Ebeling, discussed with analysts at the group’s Pharma Brand and Business Review in New Jersey, this past Wednesday. The drugmaker hopes to make savings mainly in marketing and sales, where costs rose by 11 percent last year.
SonntagsZeitugn said Novartis plans to cut significantly its US sales force after recent product setbacks - the delay in the approval of the Galvus diabetes pill; the withdrawal and then limited return of the Zelnorm irritable bowel treatment, and expectations that the Prexige painkiller won’t be approved in the US due to deaths in Australia. The sales force was expanded from 6,000 to 7,000* last year.
* UPDATE: Our initial post today, which was provided by a wire report that cited the Swiss newspaper, noted Novartis plans to save an ‘additional’ $400 million and that the sales force last year was ‘expanded’ by 6,000 to 7,000 jobs. We have since clarified those points in the post.
Lichtstrasse 35
I watched the webcast and Ebeling said that they would be looking at productivity, but he did not specifically say there would be a reduction in the headcount of the US sales force. The Swiss paper is grossly inaccurate in saying that the sales force was expanded by 6-7,000 in 2006. That is the total number of reps they have in the US. Maybe they expanded FROM 6,000 to 7,000.
Hypocrisy rules
Thw Swiss always move slowly. Ebeling’s commentary is part of the process they are going through in setting the whole thing up. Once things are in place they will do the slashing. After all with multiple sales forces in USA, Canada and other countries that sell the very same drug to the very same target doctors, the cutting back is a logical thing to do. For them especially after the failure of several drugs and the latest fiasco with their version of VIOXX. Their drug is completely ineffective at low safe dosage (like thier statin Lescol) but deadly at effective high doses. Prexige will never make it in US and will be withdrawn from other markets. This was supposed to be this Co’s mega-drug. Some mega drug just like Zelnorm.
Ed Silverman
Hi,
We have corrected the line about the sales force tally. The force was expanded to between 6,000 and 7,000, not ‘by’ 6,000 to 7,000, as the first comment above rightly points out. Please note that our post cited Thomson Financial, a wire service that was citing the Swiss newspaper. Nonetheless, we take responsibility and appreciate that Lichtstrasse 35 thought enough to write in.
Ed at Pharmalot
No surprise here
The writing has been on the wall for a long time at Novartis. One let down after another combined with some bad decisions have finally caught up with Novartis. It was only a matter of time before the growing pains really started to hurt.