Novartis blames site closure on pricing pressure in US generics market
Novartis’ (NOVN: VX) closure of a manufacturing unit in Broomfield, Colorado, is due to wider pressures affecting sales of its generics in the USA, the Swiss pharma giant has said.
Around 450 jobs at the site will be affected by the closure of commercial production operations there and although Novartis will consolidate the production of drug ingredients at a plant in Wilson, North Carolina, its generics unit Sandoz is reducing or ceasing production of some generics.
"With several products no longer competitive in saturated markets, we have made the decision to discontinue or divest these"
While the decision was a strategic one made to maximize Novartis’ manufacturing infrastructure, the company said that it had been a very difficult one.
A statement sent to The Pharma Letter read: “Due to double digit price erosion caused by customer consolidation and increased competition taking place within the US generic drug market, Novartis is currently experiencing above-average pricing pressure in our US portfolio.
“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.
“Novartis continues to have a strong presence in the USA, employing more than 23,000 people at 24 sites across the country, and we remain committed to the US market and its specific needs.”
The Basel-based company is not the only one to have suffered due to pressure on generics prices. Teva Pharmaceutical Industries (NYSE: TEVA), the world's largest manufacturer of copycat drugs, is also enduring a difficult time and Medicines for Europe, the trade group representing generic and biosimilar manufacturers in European countries, has called current prices "unsustainably low."