Lilly Plans Cuts as Pricing Pressure Drives New-Drug Push | Bloomberg Quint

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(Bloomberg) — Eli Lilly & Co. plans to cut 8.5 percent of its workforce in a bid to free up resources to fund new drugs, amid acute pricing pressure for some of its biggest products.

The Indianapolis company said some of the 3,500 job cuts will come from early retirements, with about 2,000 positions set to be eliminated in the U.S. Lilly plans to close a research facility in Bridgewater, New Jersey, and consolidate some manufacturing operations in its animal health unit, it said in a statement.

Faced with expiring patents on a number of its medicines, Lilly has been focused on diabetes drugs, which account for three of its 10 top-selling products. Its biggest seller is insulin. But intense competition from a flurry of new treatments in that market has helped drive down prices and profits.

“Around the world we have pricing pressure and I think it’s understandable,” Chief Executive Officer David Ricks said in an interview. “Patients and health-care systems, governments, want us to be more efficient. This is a step toward efficiency. It gives us flexibility and latitude to respond to events that may put pressure on our prices in the future.”

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Lilly Plans Cuts as Pricing Pressure Drives New-Drug Push – Bloomberg Quint.