4. Johnson & Johnson

In July Johnson & Johnson took the axe to its pharma division in a bid to cut up to $750 million in costs. Included in the cuts was a plan to reduce the company's workforce by four percent, or almost 5,000 employees. According to J&J, the cuts are designed to improve the company's cost structure and ensure profitable growth in the coming years. While J&J plans plans to continue investing in new technologies, it faces some significant patent losses among its current therapies. In addition, both J&J and Amgen have been embroiled in the anemia drug safety controversey, which has impacted sales of the company's best-selling drug Procrit. Medicare, which spends more money on anemia drugs than any other pharmaceutical, recently decided [1] to limit the amount of anemia drugs that it will reimburse for.

Two of J&J’s biotechs, Alza and Scios, bore the brunt of the cuts. Acquired for $12 billion six years ago, J&J is closing Alza's Mountain View facility and will lay off 600 workers. The pharma giant is also largely ending the R&D efforts at Alza, which had been structured to tweak the pharma giant's therapies. Scios--which markets Natrecor [2]--has already seen the pink slips fly and more cuts are expected. Two other J&J companies working in medical devices are also expected to undergo significant restructuring, related primarily to the problems the company has been having [3] in the drug-eluting stent market.

- see this release [4] on the cuts

J&J Timeline:
J&J restructures pharma unit, laying off workers. Report [5]
J&J: Natrecor study failed to reveal two deaths. Report [2]
J&J makes big cuts at Alza and Scios. Report [6]
Amgen, J&J win a round in anemia controversy. Report [7]
Congress spotlights J&J stent ops. Report [3]
J&J won't pursue broader uses of Procrit. Report [8]
New rules limit use of anemia drugs. Report [9]