Roche to review business and cut costs
To cope with setbacks with late-stage cancer products and rising pressures on prices
Swiss pharmaceutical firm Roche will review its business and cut costs to cope with recent setbacks with late-stage products and rising pressures on prices owing to healthcare reforms.
The firm has announced its ‘operational excellence initiative’ for implementation during 2011 and 2012, which could also mean job cuts.
The company says in view of mounting pressures to curb healthcare costs – especially in the US and Europe – together with recent developments in late-stage projects in the Roche pipeline, ‘this initiative aims to adapt cost structures and accelerate productivity improvements group-wide’.
With tightening healthcare budgets, Roche expects that payers will increasingly allocate resources to treatments and diagnostic tools providing the highest medical value for patients.
‘Therefore, Operational Excellence is not simply a cost-reduction effort but is above all about proactively setting the right priorities to ensure a successful future,’ the company said.
Detailed decisions on the measures that will be taken and the potential impact on staffing levels will be announced before the end of the year.
Severin Schwan, ceo of Roche, said: ‘We have launched this initiative from a position of strength. By contrast with many of our competitors, we are only marginally affected by patent expiries.’
He added: ‘Furthermore, despite the recent setbacks, we have one of the strongest r&d product pipelines in the industry. We will focus our resources towards investments that will drive innovation and ensure the company’s long-term success, while at the same time protecting our profitability so as to safeguard our financial flexibility.’
Roche also confirmed its full-year outlook for 2010.