Brief

Roche trims workforce in struggling US diabetes market

Dive Brief:

  • Citing competitive pressures, Roche said March 14 that it is laying off 157 employees, or more than 10% of the workforce in its U.S. diabetes care unit. That figure includes 133 full-time employees and 24 contractors.
  • In a statement, Roche Diabetes Care said it has "made the difficult decision to restructure its U.S. commercial operations" in order to "address the competitive diabetes care market and secure the long-term viability" of its business.
  • Roche said it is confident that the reorganization will position its diabetes care business in the U.S. for the future. The Swiss-based pharma said it anticipates bringing its next-generation blood glucose monitoring system — the Accu-Chek Guide system for people with diabetes — to the U.S. market in 2017.

Dive Insight:

Roche Diagnostics has nearly 3,500 employees on its campus in Indianapolis, including nearly 1,200 employees in its Diabetes Care business. Of that total, 42 Diabetes Care employees were affected by the layoffs in Indianapolis, a company representative told BioPharma Dive. Employees were given a 60-day notice, the company said. 

"The company is committed to supporting its colleagues in identifying other positions within the wider Roche organization where possible," the pharma said in a statement. 

Roche Group is one of central Indiana’s larger employers, according to the Indianapolis Business Journal, which noted the layoffs are coming only five months after Roche Group Chairman Christoph Franz visited the Indianapolis corporate campus to celebrate completion of the first phase of a $300 million development project. The first phase of Roche’s overhaul included five new buildings, upgrades to IT infrastructure and investments in diabetes-care manufacturing technology, the paper reported.

Roche is not alone in trying to adapt to the challenges of the crowded U.S. diabetes market as payers exert pressure to reduce costs through formulary exclusions, mandatory discounts and other tactics.

Danish drugmaker Novo Nordisk, for example, said in September 2016 it would make staffing cuts of 1,000 workers worldwide, about 2% of its 42,000-employee global workforce, to lower operating costs. Three months later, Sanofi said payer pressures were prompting a 20% cut to its U.S. diabetes sales force.

Relative to the rest, Eli Lilly is performing well in the competitive market. Higher-than-expected sales of its diabetes drugs, including decades-old Humalog and new Trulicity (dulaglutide), drove strong fourth quarter 2016 revenue to $3.2 billion. Lilly has said it is "gaining share across all of our products in all of the key geographies."

Filed Under: Corporate News
Top image credit: roche