Pfizer Inc., faced with slowing earnings growth and safety concerns that have hurt demand for its arthritis products, plans to cut about $2 billion in costs and overhaul the way it markets drugs to doctors, the Wall Street Journal reported on its Web site late on Thursday.
The planned reorganization at the world’s biggest drug maker is also expected to include a redeployment of about $2 billion of Pfizer’s resources into more productive areas, the newspaper said.
Citing “people familiar with the company’s evolving strategy,” the Journal said Pfizer is not planning widespread layoffs, particularly among its U.S. force of 11,000 sales representatives, although there could be some cuts through attrition.
Pfizer spokesman Paul Fitzhenry declined to comment on the company’s plans, saying they would be unveiled at the company’s analyst meeting on April 5.
The New York-based company has boasted industry-leading profit growth in recent years, fueled by booming demand for its prescription drugs and cost savings from mergers with rival drug makers Warner-Lambert and Pharmacia.
But due to competition from cheaper generic versions of some of its biggest medicines and the problems facing its Celebrex and Bextra arthritis medicines, Wall Street expects Pfizer’s earnings to grow only about 2 percent this year. That compares with 22 percent growth in 2004, when Pfizer was just beginning to feel the heat from generics.
One planned change involves ending the strategy of using multiple sales representatives to pitch products to doctors, the paper said. Instead, Pfizer plans to shrink sales territories and reduce the number of sales representatives calling on each doctor, it said.
The overall size of Pfizer’s domestic sales force would remain about the same, it said.