Dive Brief:
- Novartis AG will close a manufacturing facility in Broomfield, Colorado in response to increased competition and pricing pressure in the U.S. generic drug market, a move that will impact 450 jobs, the Swiss pharma said in a statement.
- Commercial production of generic solids will be consolidated to Novartis' facility in Wilson, North Carolina as part of a phased closure and transfer plan set to complete in the fourth quarter of 2019, reports The Denver Post.
- Employees at the Broomfield site will be offered severance packages and job placement assistance, according to the Post. No financial implications of the closure or layoffs were disclosed.
Dive Insight:
Novartis' generics unit, Sandoz, has been impacted by increasing price erosion in the U.S., which has weighed on revenue despite volume growth. That trend was particularly acute in the second quarter, when Sandoz's U.S. sales fell 15% year over year.
"Due to double digit price erosion caused by customer consolidation and increased competition taking place within the US generic drug market, Novartis is currently experiencing above-average pricing pressure in our US portfolio," Novartis said in its statement on the plant closure.
Several products were no longer competitive, Novartis explained, leading to a decision to drop or sell off those products and consolidate commercial production to North Carolina.
"While this was a strategic choice made to optimize our manufacturing infrastructure, it was a very difficult decision as the closure affects approximately 450 employees at the Broomfield site," the statement said.
This isn't the first bit of restructuring for Novartis this year. In May this year, the company announced cuts of as many as 500 jobs in traditional manufacturing and development operations at its Basel headquarters, although it plans to add 350 new "high-tech manufacturing and scientific" positions over the next two years. The drugmaker has also cut about 250 U.S. roles in data operations, moving the unit to Hyderabad, India.