450 jobs to go as pricing pressures push Novartis to close CO generics plant

By Dan Stanton contact

- Last updated on GMT


Related tags: Better, Investment, Novartis

Around half the products made at the Broomfield facility will be discontinued or divested says Novartis, blaming increased US generics competition and customer consolidation for the closure.

The oral solid dose manufacturing facility in Broomfield, Colorado, run by Novartis division Sandoz, is to close its doors within the next two years, with 450 jobs affected.

Sandoz spokesman Tim Willeford told this publication increased competition in the generic drug market has caused “above-average pricing pressure” ​and drove the decision to shutter the site and reduce its US product 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​,” he said.

“As a result, we will consolidate commercial production of our generic solids portfolio at our Wilson, North Carolina manufacturing site and close commercial production operations at our Broomfield, Colorado manufacturing site.”

Approximately 50% of Broomfield’s products deemed “no longer competitive in saturated markets”​ will be discontinued or divested, he added. These will be oral generics for a variety of conditions in cardiology, CNS, endocrinology, respiratory and pain.

“They show limited growth, are expensive to make, and are in a highly competitive market where other treatment options exist. Combined with increasing pricing pressures in the US, it is not profitable to continue making these products.”

Non-stop review

In 2016, Novartis laid out plans to restructure and consolidate its manufacturing network, and included creating a cross-divisional Technical Operations organisation​ expected to save the firm up to $1bn by 2020.

“As part of our global strategy, we consolidated all drug manufacturing operations into a new organizational model with the aim of optimizing capacity planning, improving efficiency and allowing for better resource allocation, creating a fit-for-purpose network for long term, profitable growth,”​ Willeford said.

“To achieve this goal, we are continually reviewing our manufacturing network to ensure we have an organizational structure that meets patient demand requirements, and to improve its competitiveness.”

Novartis currently operates 67 sites across all its divisions, including over 40 under the Sandoz brand.

Related topics: Contract Manufacturing & Logistics

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