U.K. pharma giant GlaxoSmithKline Plc (GSK) is to cut hundreds of U.S. commercial and research jobs, restructuring operations in its biggest market where drug sales are flagging.
A total of 900 posts will be eliminated at GSK’s Research Triangle Park site in North Carolina as drug research is consolidated in Philadelphia and in Stevenage, near London, according to a filing with the North Carolina Department of Commerce.
GSK said some staff would be offered the chance to relocate to other sites.
“This is a significant program and will result in the loss of several hundred employees in the U.S. commercial business and a similar number in R&D activities based in the U.S.,” a company spokesman said in an e-mailed statement.
Sources familiar with the matter said at the weekend the drugmaker would inform U.S. staff about the job cuts as it starts implementing a big cost-saving programme, following a sharp decline in sales of its top-selling lung drug Advair.
Britain’s biggest drug-maker announced in October that the new restructuring scheme would save 1 billion pounds ($1.6 billion) in annual costs over three years, although it did not go into details at the time.
Staff in the U.S., where GSK employs 17,000 people in commercial and research operations, were briefed on the changes on Wednesday.
“Cuts are not being made across the board but are strategic, focused changes to allow GSK to operate more efficiently,” the spokesman said. “This is a rescaling of work to reflect market forces that were anticipated but that have accelerated and are affecting the entire industry.”
Respiratory medicine has traditionally been GSK’s strongest business and Advair, an inhaled therapy for asthma an chronic lung disease, is its biggest seller. But Advair sales are now tumbling in the U.S., while new lung drugs Breo and Anoro are proving slow to take off.
Advair has been hit by competition from rivals and an increasing trend by U.S. health insurers to use hardball tactics to get drug-makers to cut prices for older products.
French rival Sanofi SA has reported similar pressures from U.S. insurers in the diabetes market.
U.S. insurers, who themselves are under pressure to keep premiums in check, are pushing back particularly hard on prices for medicines in areas like diabetes and respiratory diseases where there are multiple options for doctors and patients.