GSK cutting jobs in sub-Saharan Africa, will rely on distributors

Emma Walmsley
GlaxoSmithKline will cut jobs in Africa as new CEO Emma Walmsley takes a new approach in emerging markets.

As GlaxoSmithKline CEO Emma Walmsley continues to mold the company into something she says will be more competitive, she is changing the way it markets in emerging markets. For sub-Saharan Africa, that will mean relying on distributors, a move that will mean fewer folks on the ground.  

The company confirmed today that jobs will be lost but declined to provide any specifics about cuts on the continent, where it has about 1,500 employees. It was adamant that its drugs and vaccines will still be available there.

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“We announced at Q2 2017 that we will create a new operating model for our Emerging Markets business to ensure it is more competitive. To that end, we are restructuring our pharmaceutical operations in Sub-Saharan Africa,” a spokesman said today. “Patient access to medicines and vaccines will not be affected by this change as we will continue to work with our distributor partners, governments and WHO/GAVI/Unicef to make our medicines and vaccines available to patients in the region.”

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Walmsley’s predecessor, Andrew Witty, had expanded the company’s commitment to sub-Saharan Africa with a pledge in 2014 to invest £130 million over 5 years on projects that were designed to help Africa research and meet some of its own needs. At the time, it also said it would invest £100 million in as many as five new manufacturing facilities in different countries to produce medicines needed in Africa, like antibiotics and HIV meds.

The company told Bloomberg today that it would maintain its manufacturing sites in Kenya and Nigeria and will keep offices in Ivory Coast and Ghana. Its business in South Africa will continue to be managed by South Africa’s Aspen Pharmacare Holdings.

During the second-quarter earnings call, Walmsley said that the company’s biggest change “geographically” would come in emerging markets, where she said GSK had not done enough to sell its newer drugs like the Ellipta portfolio and Nucala. Ninety percent of sales come from branded generics in those markets.

She said GSK would create what it is calling an “end-to-end operating model” that will have its own governance model and commercial structures. Those might be a standalone business, a cluster of similar markets or a distributor-led model. Sub-Saharan Africa is getting the distributor model.

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At the same time that Walmsley is reworking GSK’s outward structure, she is making big changes internally. She has jettisoned 50 top managers—40% of GSK’s top management team—in an overhaul that has spanned consumer to oncology, and includes hires from both inside and outside the company. From the outside, she has enticed execs from companies that include Google, Novartis and Teva.