King reduces workforce by 20%, cuts mostly sales jobs
King Pharmaceuticals will cut 20% of its 2,600 employee workforce after a federal appeals court judge ruled against a patent extension on the company's blood pressure treatment Altace.
Most of the 520 layoffs will come from the Bristol, TN-based company's field sales force, King spokesman James Green told a local newspaper, The Bristol Herald Courier.
"Most of these reductions are going to our field sales force," Green said. "Those are our people that go to see doctors and tell them the benefits of our products. They are located all across the country."
Green added, "All of those will receive 60-day notices and an array of benefits, including severance [pay] and health care."
Green said about 50 jobs "general and administrative" positions will be slashed in Bristol. He told The Courier that individual managers were given the discretion to decide who would be laid off.
King anticipates it will save $75 million - $90 million in 2008 as a result of the cuts.
Altace is King's top-selling drug, bringing in $163 million in sales during the second quarter of 2007, compared to $154 million in the same period in 2006.
King's downsizing announcement follows a decision from the US Court of Appeals, which ruled against continued validity of the patent covering Altace. The court's decision paves the way for competition from cheaper generic versions of the medicine, known chemically as ramipril.
"The future of the Altace franchise is uncertain," Green said. "We could have generic versions of Altace entering the market faster than any of us expected, so we have to prepare for that."
King officials have filed a petition seeking reconsideration of the ruling on grounds that the decision 'involves significant errors."