GlaxoSmithKline is preparing to inform US staff of hundreds of job cuts as the UK drugmaker battles to reverse a downturn in its biggest market.
The measures are part of a £1bn cost-saving plan announced in October after months of sliding sales in its crucial US respiratory medicines business.
GSK’s dominant Advair asthma drug has been losing market share and pricing power as US insurers and healthcare providers clamp down on costs.
Job cuts could be announced as soon as this week, according to people familiar with the matter. GSK would not confirm this, saying staff would be told first.
The company said it was pressing ahead with the restructuring programme announced in October.
A statement added: “The aim of this program is to improve performance by taking unnecessary complexity out of our operations and establish a smaller, more focused, organisation, operating at lower costs.
“Each business unit is currently deciding how to respond to this challenge.”
US respiratory drug sales account for 12 per cent of GSK’s total business and declined by 17 per cent in the first nine months of this year.
The ageing Advair brand is in long-term decline while two new lung drugs, Breo and Anoro, have failed to take off as quickly as GSK had hoped.
Sanofi of France has reported similar struggles with its diabetes treatments in the US, highlighting increased price pressure across the US primary care market.
Industry executives say consolidation in the US healthcare market is giving insurers and providers more leverage over drugmakers, while President Barack Obama’s healthcare reforms have also increased pressure to lower costs. The Affordable Care Act was designed to widen insurance coverage while driving more efficiency from the 18 per cent of US gross domestic product spent on healthcare.
Struggles in the US have combined with a corruption scandal in China to make it a tough year for GSK, whose share price is down almost 8 per cent in 2014.
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