Roche fashions cost-saving overhaul

Roche is indeed restructuring. The company is launching a cost-cutting-slash-efficiency initiative that is sure to claim some jobs; however, no numbers have been released yet. And if an internal memo about the Operational Excellence project is any indication, Roche doesn't yet know just how it plans to remodel its business--much less how many job cuts might be required.

There are plenty of reasons why Roche needs a rethink, as CEO Severin Schwan (photo) says in a statement. Consider pricing pressures--both from U.S. healthcare reform and European belt-tightening--or the recent "pipeline disappointments," as the internal memo puts it. These "disappointments" include the side-effects trouble with taspoglutide, its experimental diabetes drug, that's put off an approval app by at least a year, and the FDA's rejection of accelerated approval for its breast-cancer drug trastuzumab-DM1. But the Swiss drugmaker appears to be trying to go beyond reacting to events, aiming to position itself for a brave new payer-focused world.

Here are the details we have, from the company's announcement and the internal memo. Teams within each area of the pharma business--individual research sites, procurement, geographically focused commercial operations--will come up with cost-efficient ideas, "either by finding new, much more efficient ways of getting the work done or by stopping activities that don't make the best use of resources," the memo states. The teams will come up with savings targets as well.

That fact-finding stage will wrap up in October. Between October and December, management will review the teams' ideas and send them back for conversion into detailed action plans. The company hopes to start rolling out the changes in early 2011; the company's statement promises "potential impact on staffing levels" would be announced by the end of the year.

- here's Roche's release
- get the Bloomberg story
- see the article in the Wall Street Journal
- check out the Reuters piece
- read the news in PharmaTimes