Pfizer plans cut to $2 billion in costs, Wall Street Journal reportsPfizer, facing a string of patent expirations and slow earnings growth, plans to cut $2 billion from its costs and to overhaul the way it markets drugs to doctors, the Wall Street Journal reported today.
The planned reorganization is also expected to include a redeployment of about $2 billion of Pfizer's resources into more productive areas, the newspaper said.
Citing "people familiar with the company's evolving strategy," the Journal said Pfizer is not planning widespread layoffs, particularly among its U.S. force of 11,000 sales representatives, although there could be some cuts through attrition.
Most of the cuts under consideration would target administrative and support functions throughout the company's operations.
However, if the FDA recommends restriction on COX-2 drugs next week, the outlook for Celebrex and Bextra could be further darkened and lead Pfizer to reduce costs more deeply.
In recent weeks, Pfizer has sought to reassure sales managers and reps about their future.
During a meeting last month, they were told the domestic sales force would stay intact.
And in a letter to employees last month, signed by Pfizer executive vice president Karen Katen and chief financial officer David Shedlarz, the company stressed, "This is not an exercise to reduce head count. This is a project to knock down inefficient silos throughout the company and to put our best talent to use."
Pfizer has stared to feel the pain of patent expirations on some of its biggest sellers.
Last year, antifungal Diflucan and epilepsy and pain medicine Neurontin lost patent protection. Antibiotic Zithromax, another blockbuster, loses patent protection late this year. All told, products with about $14 billion in revenue will face generic competition by 2006.