Novartis to shut down its US generics plant under pricing pressure

Novartis has announced that it's going to close its US generics manufacturing plant in Broomfield, Colorado, a change that will resulted in a cut of 450 jobs over two-year long.

A decision that will lead to a cut of 450 jobs over two-year long.

According to the company, the decision was made due pricing pressures in as a result of "double-digit price erosion caused by customer consolidation and increased competition taking place within the US generic drug market".

Drug ingredient operation from the closed Broomfield facility will be transferred to another of the company’s plants in Wilson, North Carolina.

"With several products no longer competitive in saturated markets, we have made the decision to discontinue or divest these limited growth products to optimize our product portfolio," explained Sandoz spokesman Tim Willeford. "As a result, we will consolidate commercial production of our generic solids portfolio at our Wilson, North Carolina manufacturing site and close commercial production operations at our Broomfield, Colorado manufacturing site.

"They show limited growth, are expensive to make, and are in a highly competitive market where other treatment options exist. Combined with increasing pricing pressures in the US, it is not profitable to continue making these products," he added.

The facility, operated under the firm’s Sandoz division, is one of 40 under that name and a total of 67 under the wider company, comprising 133,400 staff worldwide. 24 or these locations are in the US, employing over 23,000 people. Sandoz has announced that it will offer severance packages to those affected along with job placement assistance.

Willeford continued: "As part of our global strategy, we consolidated all drug manufacturing operations into a new organisational model with the aim of optimizing capacity planning, improving efficiency and allowing for better resource allocation, creating a fit-for-purpose network for long term, profitable growth. To achieve this goal, we are continually reviewing our manufacturing network to ensure we have an organisational structure that meets patient demand requirements, and to improve its competitiveness."