Here's another cost-cutting move at a drugmaker that managed to grow sales in 2009 but expects big competition once a major drug hits the patent cliff. The company is Bristol-Myers Squibb, and the drug in question is Plavix, which could face generic rivals as early as November 2011. Therefore, Bristol is looking for savings in the form of a salary freeze for 2010.
Specifically, the company is eliminating "annual salary increases in 2010 for Bristol-Myers Squibb employees worldwide," a spokeswoman wrote to the Wall Street Journal Health Blog, "except where these practices cannot be eliminated based on legal mandate or contractual obligation." The freeze won't affect employee bonuses, so sales folks and other incentivized staffers will still have that carrot to keep them motivated.
Bristol reported a 6 percent increase in 2009 sales, and CEO Jim Cornelius predicted EPS growth for 2010. But Plavix is its top-selling drug and accounted for $1.62 billion of the company's Q4 sales. It's tough to lose patent protection on a multibillion-dollar drug. And obviously, Bristol isn't alone.