For the second time in less than a week, Pfizer ($PFE) has revealed plans to cut hundreds of jobs in a market where government pricing cuts are putting a squeeze on drugmakers. The company is working with Spanish officials on a 11% workforce reduction there, or about 220 jobs, on the heels of 500 job cuts in Germany.
In both cases, the cuts are aimed mostly at sales and administrative functions. In both cases, the company blamed Eurozone economic woes--and newly restrictive government pricing.
A Pfizer spokesperson said the "financial crisis in Europe" and a series of reductions to reference prices on drugs touched off the job cuts, Spain's Expansión newspaper reports. Among them is a new policy requiring doctors to write prescriptions using a drug's generic name, not brand names, which would obviously divert sales away from any branded drugs with generic competitors.
That will no doubt help the cash-strapped government. But with Spain being one of the few markets worldwide where Pfizer's top-selling Lipitor already faces generic competition, the new policy promises even more sales erosion. Pfizer's first-quarter international sales took a 25% hit, in part because of generic Lipitor: Financial results were "negatively impacted by the loss of exclusivity of Lipitor in Canda and Spain," the company said at the time. So Pfizer can't be happy that doctors will soon have to write their scripts for "atorvastatin" instead of "Lipitor."
Expansión cited the new generic-script rules in an editorial warning the government about cutting healthcare costs willy-nilly. Spain needs to streamline its health system, the paper allowed, but needs to do so carefully and deliberately, rather than improvising new cost-saving rules on the fly.
- read the Bloomberg news
- get the piece from Expansión
- see the Expansión editorial