Eli Lilly to freeze employee base pay ahead of generic onslaught
NEW YORK (Reuters) - U.S. drugmaker Eli Lilly & Co (LLY.N), which expects to lose about 20 percent of its global revenue next year due to the expiration of key drug patents, is suspending base pay increases for most employees in 2014 to cut costs.
At the end of this year Lilly's current biggest product, the antidepressant Cymbalta, will lose patent protection while copycat forms of its $1 billion-a-year Evista osteoporosis drug are due to arrive in early 2014.
The company has also decided to reduce employee bonuses paid out in 2015 for their performance in 2014.
The news came just months after the drugmaker decided to layoff about 1,000 domestic sales representatives to cut costs.
"This is a difficult, but necessary decision," company spokesman Edward Sagebiel said on Wednesday. "We continue to face the most significant challenges in our history."
"While we've taken many actions to reduce costs and become a leaner organization, we must do more," Sagebiel said, adding that the company expects to save about $400 million through 2016 with the help of these cost-cutting efforts.
Sagebiel said Lilly employees will be eligible for base pay increases in 2015.
- Malaysian plane still missing; questions over false IDs |
- China draws 'red line' on North Korea, says won't allow war on peninsula
- Warning shots fired to turn monitors back from Crimea |
- Malaysian plane crashed off Vietnam coast: state media