Novartis plots 400 job cuts in India after striking sales pact with Dr. Reddy's

A bid to boost access to Novartis’ drugs in India is putting hundreds of jobs on the chopping block.

Novartis India has forged an exclusive sales and distribution pact with Dr. Reddy’s Laboratories centered on certain established meds, including the pain-relief drug Voveran and Methergine, which is used to treat severe bleeding from the uterus after childbirth. 

The pact is meant to broaden access to the meds beyond their current geographies, which Novartis and Dr. Reddy’s will accomplish “by significantly extending the reach of healthcare professionals through an expanded field force,” Novartis said. The deal will fuse Novartis India’s manufacturing and development know-how with Dr. Reddy’s sales and distribution muscle, the company said.

Novartis India plans to cut 400 jobs with the move. The company says it understands “the implications of this difficult decision," so it's offering employees a severance package and outplacement services.

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Novartis employs more than 10,000 full-time staffers in India, the company said. Since January 2020, the company has hired more than 1,600 employees worldwide. Novartis’ Indian outfits plan to continue this hiring push in 2022, the company noted.

Meanwhile, Novartis is investing to upgrade its R&D and manufacturing footprint in the country. Over the past five years, it has spent more than $300 million on an Indian R&D support center, for instance.

Elsewhere in the country, the company is building out a $49 million manufacturing plant at Kalwe, which will manufacture oral cancer meds for the global market.

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The Dr. Reddy's news comes as Novartis conducts a strategic review of its generic unit, Sandoz. Investor groups Blackstone and Carlyle could join forces on a massive $25 billion bid for Sandoz, Bloomberg has said, citing people close to the matter. Novartis says it will provide an update on its plan for the generics outfit by the end of the year.