Novartis ($NVS) chief Joe Jimenez (photo) started slashing expenses at the drugmaker even before he took over the CEO's job. That cost-cutting has continued apace, with jobs and facilities facing the axe since his tenure began. And it's likely to continue at a similarly brisk pace going forward, the Wall Street Journal reports, as pricing pressures and generic competition continues.
Let's review the cuts so far: As pharma chief, Jimenez changed procurement policies to shave 10 percent to 15 percent off purchasing costs. As CEO, he cut 1,500 jobs and launched a manufacturing-efficiency drive--one that recently claimed a U.K. plant, and 500 jobs along with it. It's all part of Jimenez's bid to make Chairman Daniel Vasella's (photo) "focused diversification" strategy work.
"Historically, the pharmaceuticals industry hasn't focused as much on cost reduction," Jimenez says. That's changed over the last couple of years, of course, as the patent cliff steadily approached and Big Pharma started shedding jobs by the thousands. But Jimenez says his cost-cutting focus is different from the rest: He's not cutting just to boost margins, but also to free up money to invest in R&D. He figures that more and better R&D will lead to higher sales.
- read the WSJ interview