UPDATE 2-Novartis to cut U.S. jobs ahead of patent expiries

* To slash 1,400 jobs in general medicines field force

* Effective from Jan. 1, 2011

* U.S. pharma unit employs over 13,000

* Restructuring to result in a one-off cost of some $85 mln

(Adds details, background)

By Katie Reid

ZURICH, Nov 30 (BestGrowthStock) – Novartis AG (NOVN.VX: ) will slash
its U.S. salesforce for general practice drugs as it forges
ahead with a push into specialty medicines and seeks to
streamline its business ahead of patent expiries.

The 1,400 job cuts will come into effect on Jan. 1, 2011 and
the restructuring is expected to result in a one-time cost of
around $85 million, the Swiss drugmaker said on Tuesday.

Novartis’s pharmaceuticals business has over 13,000
employees in the United States, while the group as a whole has
more than 18,000 workers there. The group has around 100,000
employees in total.

The news comes after cross-town rival Roche (ROG.VX: ) said it
would cut around 6 percent of its workforce, while Germany’s
Bayer (BAYGn.DE: ) has said it is planning to cut thousands of
jobs as part of a 1 billion euro cost-cutting programme.
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Novartis is moving away from mass-market medicines used to
treat ailments such as hypertension ahead of the patent expiry
of key drugs over the next few years.

Blood pressure drug Diovan, a $6 billion-a-year product,
will face generic competition in Europe from next year and from
2012 in the United States.

The group is now banking on specialty drugs for future
growth, such as Gilenya, which was recently approved in the
United States as the first oral treatment for multiple
sclerosis.

“Given these changing dynamics within the portfolio, it is
critical to realign the general medicines field force to sharpen
focus on the greatest opportunities for growth,” the group said.

Earlier this month, Novartis said it was ramping up a
group-wide efficiency drive and was starting to review its
manufacturing as well as its marketing and sales processes.
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Novartis, like other companies in the pharmaceutical
industry, will have to deal with a number of key drugs losing
patent protection over the next few years, while pricing
pressure in the United States and Europe is also making for a
tough environment.
(Editing by Erica Billingham and David Holmes)

UPDATE 2-Novartis to cut U.S. jobs ahead of patent expiries