J&J trims pension benefits for new hires

Even drugmakers with steamrolling pharma units need to cut costs sometimes, and Johnson & Johnson ($JNJ) fits that bill. To do so, the company will shrink the pension benefits offered to those who are hired--or rehired--after Jan. 1.

Peter Fasolo

According to Peter Fasolo, J&J's worldwide VP for human resources, the move--which won't apply to current J&J employees or retirees--reflects the benefit landscape's recent evolution.

"The changes will more closely align with benefits offered by our competitors and maintain a retirement program that's above average among our peer companies," he wrote in an internal memo seen by The Wall Street Journal's Pharmalot. "… More importantly, it will continue to support our efforts to attract and retain talent to drive innovation and growth across our family of companies, helping us manage for the long term."

On the pharma side, J&J has been on a roll as of late thanks to strong performances from drugs like hep-C fighter Olysio, next-gen prostate cancer med Zytiga and Xarelto, the clot-fighter it codeveloped with Bayer. Those products took prescription drug sales up by 21% in Q2 to $8.5 billion, pushing J&J's overall sales haul to $19.5 billion--a 9.4% increase.

But not all of the company's other units have seen the same success. Medical devices sales have lagged, and the company's OTC unit is just getting back on track after a series of manufacturing foul-ups.

So the New Jersey pharma giant is pinching pennies where it can. Earlier this year, its DePuy Synthes medical device unit cut all travel--except that of sales reps--for the rest of this year, hoping to cut those costs by 25%, Pharmalot notes.

And like many of its Big Pharma peers, J&J has a couple more extreme cost-cutting measures in the rearview mirror, too. In June of 2011, the company announced up to 1,000 layoffs after stopping production of its Cypher and Cypher Select drug-coated stents. That announcement followed an 8,900-employee chop job in 2009.

- get more from Pharmalot

Special Report: Top 10 pharma companies by employees - Johnson & Johnson

Suggested Articles

Johnson & Johnson faces a litany of problems, but executives are clearly not concerned—at least not about the company's short-term fortunes.

This week, Goldman Sachs resurrected a burning question: How can pharma companies profit from curing patients with one-time gene and cell therapies?

CMS has determined how it'll pay for Gilead's CAR-T cancer therapy, Yescarta, for outpatient use, but hasn't yet decided on Gilead's…