Pharma feeds contract manufacturing

Big Pharma announced thousands of layoffs in 2007. Companies have already started passing out pink slips. But a flurry is still to come as Bristol-Myers Squibb, Novartis, GlaxoSmithKline and others push forward with their restructuring plans. Look for hundreds of millions in charges against earnings as these companies lower the ax. BMS has said it expects $1.3 billion in costs associated with its restructuring, for instance.

As staff goes out the doors carrying boxes of their personal effects, entire plants are being shuttered or sold off. Does that mean drug makers won't be making drugs anymore? Well, they won't make all their meds themselves. In a word, outsourcing. AstraZeneca plans to farm out a big chunk of its manufacturing--perhaps all of it--within 10 years. Pfizer aims to double its contract manufacturing to 30 percent from 15 percent.

So pharma will definitely be a slimmer sort of business by year's end. Will it be meaner as well as leaner? We'll see.

- see our special report on the top layoffs of 2007
- here's more on BMS's leaner future in the Star-Ledger
- take a look at this report on AstraZeneca's outsourcing plans
- read the article on Pfizer's intent to move drugmaking to Asia

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