Wyeth cuts 1200 sales reps

As of today, the affected US sales reps no longer have a job and will be given severance pay. In 2005 Wyeth also slashed its US primary-care sales force of 2,500 full-time employees by almost 30 per cent, but replaced some of these with part-time sales reps, with the overall net reduction panning out at 15 per cent. It is unclear at this point whether the firm plans to adopt the same strategy, or will place an increased reliance on contract sales representatives, which can reduce company overheads as they are only paid for when needed by the company. Wyeth management are currently undertaking a company-wide evaluation with the aim of "transforming its business and reducing spending." Given the firm's documented penchant for outsourcing or off-shoring anything in its business that is not a core function, the firm is expected to increase its activity in this area as part of its plans. In order to stay competitive, Wyeth has said in the past that it looks to model its business not on that of other pharma companies, but of other successful big industries which have long relied on outsourcing or off-shoring all the non-core functions that can be done better by another company, to improve cost, time and other efficiencies. The firm is being motivated to make the latest changes after a series of setbacks it has experienced in getting four of its drugs to market over the past year. Since the beginning of 2007, the US Food and Drug Administration (FDA) has delayed granting regulatory approval for Wyeth's schizophrenia drug Bifeprunox; Pristiq, a treatment for depression and menopause symptoms; Viviant, a drug to treat bone loss; and anti-constipation medicine methylnaltrexone. Moreover, its kidney cancer treatment Torisel; and Lybrel, a contraceptive, also experienced regulatory delays before finally being approved. Even short delays in getting drugs to market can cost pharmaceutical firms millions of dollars in expected earnings. Meanwhile, Wyeth is also feeling the heat from generic competition. In December, Teva Pharmaceutical unexpectedly released a generic version of Wyeth's Protonix heartburn medicine, which threatens to severely erode the drugs's revenue, which for the first nine months of 2007 raked in $1.45bn. Teva has now temporarily frozen sales of its copy cat version until the two firms come to an agreement over a dispute over the Protonix patent. Moreover, this year, Wyeth's biggest selling medicine, the antidepressant Effexor, is also expected to have to stave off generic competition when Sun Pharmaceutical Industries launches a tablet version of the drug. Sales of Effexor, which were $2.83bn for the first nine months of 2007, are expected to be substantially stunted as a result.