Maybe we're starting to see a mini-trend with Big Pharma. It would seem that Big Pharma is not afraid to threaten and/or follow through with job cuts in countries that enact policies they feel are unacceptable. Witness the following examples:
- On April 13th, In the Pipeline reported that both Novartis and Roche senior executives met with UK government ministers behind closed doors to inform them in blunt terms that they were prepared to cut R&D jobs and close sites if proposed pricing and clinical trial regulations were enacted as contemplated. The two Pharma giants have about 5000 employees in the UK. Government officials were said to be scrambling to "play nice".
- Sanofi-Aventis in Canada just cut 70 jobs as part of a reorganization blamed on loss of patent exclusivity. Further, the company took the opportunity to take the Canadian goverment to task for weakening patent protections and "favoring generics" - even while patents are still in effect. Sanofi says it will curtail R&D investments, capital expenditures and job creation in such an environment.
Thus Big Pharma has some clout to bring to bear when it comes to policy, pricing, and regulatory rules it cannot abide. It can pick up its bat and ball and move to another field. It will be interesting to see how often this type of strategy will show itself in the coming months and years - particularly in the slower growing, more regulated Western economies (ballparks).
It will also be interesting to see how various World governments choose to deal with such a tactic beyond grovelling of course - which I don't think is wise or sustainable. It also may not be in the long-term interest of the governed as well. You know all us believers in capitalism and free markets. How can we weigh the job losses of the few against the price cuts for the many? Only politicians can say for sure.
Posted by Bruce Lehr May 10th 2010.
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