Boehringer Ingelheim aims to cut German costs 15% as revenues drop

By Dan Stanton

- Last updated on GMT

Boehringer aims to cut German costs 15% as H1 sales fall

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German jobs are safe despite a programme that will cut the cost of operations by 15%, Boehringer Ingelheim says as it reacts to international price reductions.

For the first half 2014, Boehringer Ingelheim reported an 8.5% fall in sales - €6.5bn ($8.7bn) compared with €7.1bn last year. The decrease was attributed to a series of changes in the international pharma market, the firm told adding that it is implementing a series of cost-cutting measures in response.

“The price pressure is rising, the access to markets is getting more difficult, and the competitive situation has intensified worldwide,”​ spokesperson Julia Löffelsend said. “In order to assert ourselves in this environment, we need a more flexible, agile – meaning less complex – competitive organisation.”

Specifically, the firm is planning a lasting reduction of costs in Germany, with aims to decrease budget in its native country by 15 percent.

“The aim is to create more freedom for the introduction of new products and for further future investments. From today’s point of view we are planning more than ten new introductions in the coming two years.”

Boehringer Ingelheim’s German workforce has grown by nearly 1,000 over the past twelve months and at the end of June totalled 14,087. “Now we are entering a phase of consolidation and have to limit this increase,”​ Löffelsend told us, adding this was neither a cull, nor a hiring freeze but a natural and long-term reduction of the workforce.

“We take every cost position very carefully into consideration. It might be that we have to reallocate headcount or cannot replace vacant positions. But in other sectors where it is strategically very important we will still hire people.”

The measures will focus on all of the firm’s operations in Germany, including its facility in Ingelheim, near Mainz, which manufactures the respiratory drug Spiriva, as well as the oral anticoagulant Pradaxa. The plant, which also serves as the company’s headquarters, was found to have violated GMP in May 2013​, but received a close-out letter​ from the US FDA in June this year.

The firm also has a facility in Dortmund which makes the Respimat Soft Inhaler, and a biopharmaceutical development and manufacturing site in Biberach.

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