By Tracy Staton and Eric Palmer
Salesforce cuts are coming down at Eli Lilly ($LLY), and 40% of its U.S. sales force will be out. According to the company, the drugmaker sent a state Warn Notice to 1,624 sales positions, of which about 1,000 will be let go. It's all part of Lilly's patent-cliff suffering, with Zyprexa already beaten down by generic rivals and Lilly's new top seller, Cymbalta, set to lose exclusivity in December.
Lilly disclosed the layoff numbers in a filing last month with the Indiana Department of Workforce Development. Of those facing the ax, 360 are workers on fixed-duration contracts already scheduled to expire. Communications Director J. Scott MacGregor said another 685 full-time sales employees also will be let go.
But the company has about 560 positions that are being "reallocated" that could be filled by employees slated to lose their jobs, MacGregor said. The unlucky sales staffers will have the opportunity to apply for other jobs at Lilly on their way out. Those who don't find other jobs within the company will make their exits on July 15.
Patent losses have taken a big bite out of pharma's sales ranks, as companies gear down their marketing of drugs that no longer have a lock on the market. Pfizer shed hundreds of reps late last year as Lipitor generics ate away at that once-mighty blockbuster. The newly independent AbbVie ($ABBV) was set to hive off hundreds of its own cardiovascular reps to make up for losing exclusivity on TriCor, TriLipix and Niaspan. And Lundbeck, suffering from generic versions of its antidepressant Cipralex, said it would cut 600 jobs.
Lilly well knows what's coming when Cymbalta faces generic rivals. Its former best seller, Zyprexa, lost 83% of its sales last year, ending 2012 with just $380 million. Cymbalta accounted for $5 billion of Lilly's 2012 sales and brought in $1.3 billion during the first quarter of this year--almost 25% of the company's $5.6 billion total.
- read the WARN Notice (PDF)
Special Report: Cymbalta - Top 15 drug patent losses for 2013
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Editor's Note: The story was updated to indicate that Lilly had notified 1,624 employees their jobs are being changed or eliminated, but that only about 985 will be losing their jobs.