Originally published January 20 2012
Drug companies slash thousands of jobs as new drugs fail, old patents expire
by Jonathan Benson, staff writer
(NaturalNews) For years, many major drug companies have had it made with a steady stream of new "blockbuster" drugs that carry with them 20-year patents, ensuring years of billion-dollar profits. But many of these patents are now expiring, and these same drug companies have largely failed to concoct successful new drugs to take their place, which has resulted in widespread employee layoffs and major downsizing within the drug industry.
According to a recent Reuters report, drug giant Novartis AG is laying off roughly 2,000 of its sales force employees due to its largest wave of patent expirations. AstraZeneca, another major drug company, announced recently that it is laying off 25 percent of its US sales force. And Sanofi SA announced late last year that it will make cuts in its sales and research and development (R&D) divisions as the company consolidates all its North American facilities (http://online.wsj.com/article/SB10001424052970203716204577013930254809686.html).
To be clear, all three of these companies still rake in billions of dollars every year for drugs they produce and sell. But now that times are getting a little bit tough, they are rapidly eliminating their US and North American workforces, consolidating their corporate structures, and unscrupulously continuing to export jobs overseas to countries where more profits can be made.
About a year ago, data compiled by EvaluatePharma, an industry analysis group, revealed that more than $15 billion worth of drug patents were set to expire last year. And by 2016, a whopping $133 billion worth of drug patents will expire, which means that generic drug manufacturers will swoop in and break up the monopoly by selling those drugs at much lower, and more appropriate, prices (http://www.naturalnews.com/031234_drug_patents.html).
The only way the major drug players are able to maintain multi-billion dollar a year profits, you see, is by innovating new drugs, buying their approval from the US Food and Drug Administration (FDA), and watching the cash flow in for 20-or-so years while they work on producing a new set of drugs. It is a continuous cycle that generates obscene profits for the drug industry at the expense of public health.
Besides just a decrease in the number of new drug developments, major drug makers are facing great losses with the few they have already released, as studies often show them to be useless or even harmful. Novartis' blood pressure drug Rasilez, for instance, was recently found to make patients' condition worse rather than better. As a result, the company's profit projections for Rasilez have had to be readjusted, and may potentially have to be readjusted again if the drug is pulled from the market.
Sources for this article include:
http://www.reuters.com/article/2012/01/13/us-novartis-idUSTRE80C0EB20120113
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