Novartis CEO reshapes drugmaker for 'brutal' new world

Reuters | Caroline Copley and Ben Hirschler 

Novartis Chief Executive Joe Jimenez is taking a hard look at the drugmaker's smaller businesses as he reshapes the company for what he expects to be a "brutal" new era in healthcare spending.

At least one of the three sub-scale units - animal health, vaccines and over-the-counter medicines - is not expected to make the cut, he told Reuters in the clearest indication yet of how the review is progressing.

"I really wish we could make all three of those businesses global scale, but I think it's unlikely," Jimenez said.

Eli Lilly freezes salaries, cuts bonuses

Eli Lilly ($LLY) has once again put its payroll in the deep freeze. For the third year in a row, the U.S.-based drugmaker says most employees won't see salary increases because of patent-cliff losses, The Wall Street Journal reports. And Lilly is cutting cash bonuses, too.

Lilly staffers might have seen this coming. Early this year, CEO John Lechleiter said 2014 would be the most financially challenging yet. Still suffering from the loss of Zyprexa's patent in late 2011, Lilly now faces generic competition for its top-selling drug, Cymbalta. Its attempts to fill those sales gaps have been less than successful, with several potential drugs now in the discard pile.

Most recently, Lilly and partner Boehringer lost out at the FDA with their new diabetes drug empagliflozin; the agency refused to approve the drug because of manufacturing shortfalls.

The prospects for pharma companies to develop a commercial trade channel across Europe could hardly be greater.

Few headlines capture the essence of a subject as succinctly as that donning the latest report from A T Kearney on the commercial trade channel (CTC) opening up for pharma companies across Europe. But while compelling arguments can be made for engaging in strategies that involve less detail and more retail, there remain a lot of grey areas for companies that want to take a more commercial approach.

Pablo Moliner, a partner in the company's Madrid office, told a breakfast meeting in London on March 21 that a more directly commercial approach can increase sales of mature drugs by between five and 25 percent. The wide range in potential gains stems from factors such as the kind of drugs, the different opportunities presenting from the varying remuneration arrangements for pharmacists across Europe and the fact the CTC involves relatively new thinking for pharma.