Az

macaque_2

If this turns out to be true, the total number of lost jobs could be 10,000+ (when all the sub suppliers and service companies are included).

5 years ago many of these forums were full of clap trap about the UK moving to a post industrial economy where we made money from ideas and services whilst other parts of the world did the manufacturing. For 'post industrial economy' read laziness and complacency.

Companies like Astra Zeneca were full of their own success but they evolved at a time when discovering block buster drugs was a lot easier than today. Like many of the big pharma companies they are now shrinking under a burden of high costs and low productivity.

Some interpret all this as 'gloom mongering'. I don't agree. Prosperity comes from education, hard work and investment. The economic problems we are going through will be all for the good if it helps us to remember this.

The 2012 layoffs toll may continue to mount. British newspapers are reporting that AstraZeneca's cost-squeezing program could grow by another 3,000 or so job cuts. The company is said to be preparing an announcement in conjunction with its earnings release later this week.

http://www.fiercepharma.com/story/ax-hovers-over-3000-more-astrazeneca-jobs-uk-papers-say/2012-01-30

Thrugelmir

macaque wrote: »

Companies like Astra Zeneca were full of their own success but they evolved at a time when discovering block buster drugs was a lot easier than today. Like many of the big pharma companies they are now shrinking under a burden of high costs and low productivity.

Like technology has peaked. So has the pharma industry.

The key is to find the next boom.

Apple didn't invent the pc mouse. Jobs saw the concept in a Xerox lab that had been sitting round for 10 years......

misskool

The pharma industry are doing what they do best. Right now, many of them are sub contracting their work to hard pressed university labs who can do it cheaper. It also keeps the university labs going while they wait for the next lot of money from whichever grant awarding body hasn't cut their allocation yet.

They are also buying smaller spin offs from universities which were generated to make money. They did use to gobble them up but they are now more cautious.

IronWolf

AZN is not typical of the whole industry though. Yes it is becoming far more expensive to discover new drugs, but they are heavily reliant on a few drugs whereas others are more diversified so don't face the impending patent cliff that AZN do.

There is an easy way to solve these problems though, extend the life of patents, to reflect the increased costs and time of R&D.

RenovationMan

A lot of companies, including mine, are using the recession as a cover to change employee contracts and shed some deadwood. Employees are just happy to have a job and so the unions are effectively toothless in the face of this. It's a lot easier to have a strategic review is a recession than it is during a boom, employees and unions are a lot less militant.

A few job losses doesn't necessarily mean we are going to return to ship building, cotton mills, coal mining and other industrial revolution industries.

kabayiri

macaque wrote: »

...
5 years ago many of these forums were full of clap trap about the UK moving to a post industrial economy where we made money from ideas and services whilst other parts of the world did the manufacturing. For 'post industrial economy' read laziness and complacency.
....

It was clap trap really.

Politicians love this sort of thing. There was Gordon Brown, talking about a move to a knowledge-based economy.

I don't think he had a clue about how this could be done, but rest assured....an army of "consultants" would be there to advise him should he ask - for a big fat fee of course. Spin meisters, the lot of them.

I believe all our "rocket scientists" went into the city to make mega bucks inventing the AAA-subprime-loanbuster-insuro-derivative.

Now we don't have any rockets...

purch

....or even any catherine wheels :eek:

Jennifer_Jane

In 2000 the Swedish Company, Astra, makers of Losec, and Zeneca merged. They both had operations in numerous countries, as well as R&D all over the place. So in 2000/01 there was major restructuring, then again about 5 years ago (when they closed the Macclesfield factory), and said that thousands had to go globally. They had 55,000 employees then. Factories were closed all over the place and opened in China and India.

This last year the Charnwood operation was closed. Now it seems they have 60,000 people globally. So I'm confused about what use their restructuring has been. You can say that by getting rid of people who have been there years and are simply staying for the pension, is a good thing, but frankly I don't see anything that has helped the Company by bringing in new blood, often from out of the area (I'm talking mainly about the Macclesfield area here, although AZ was also a major local employer in Sodertalje (sorry don't know how to do the accents) in Sweden.

For 10 to 15 years they have known that they had little in the pipeline and that 2009 onwards was going to be tricky with products coming off patent. They don't seem to have had anything much that they were able to do apart from buying a couple of companies (MedImmune was one) and divesting of the Dental division. They have tried to work faster to bring new products to market, but I see nothing much happening in terms of megabrands. Cost cutting has been going on for years and years.

They have had great disappointments with some of their products: Iressa, designed for head and neck cancers appeared to be a good product, but was mainly effective for Asian patients and is now a niche product rather than a blockbuster.

An interesting case study, and I wish them well, but am glad I no longer have shares in them.

Just editing to say that, obviously, companies like AZ prolong their patents for as long as they can. But it often might just give them five years or so, and even with smallish changes or use change (eg Losec to Nexium), or Zomig nasal spray, these are small things which a necessary for the Company, but are not the trailblazing megabrands they need.

Thrugelmir

IronWolf wrote: »

AZN is not typical of the whole industry though. Yes it is becoming far more expensive to discover new drugs, but they are heavily reliant on a few drugs whereas others are more diversified so don't face the impending patent cliff that AZN do.

Return of R&D expenditure for drug development is down 50% compared to 10 years ago. As the number of new blockbuster drugs is falling. Drug companies are maturing and need to diversify into more markets..