Sep 7, 2017 - Economy

Eli Lilly slashes 8% of workforce

Darron Cummings / AP

Pharmaceutical giant Eli Lilly is cutting 3,500 jobs, or more than 8% of its entire workforce, to put more money toward developing new drugs and to "improve its cost structure," the company said Thursday. Most of the job cuts, expected to save $500 million, will come from early retirement buyouts.

  • Another major reason for the job cuts: Drugs losing patent protection. Cialis, Lilly's erectile dysfunction drug, which had $2.5 billion in worldwide sales last year, loses its patent in November. Patents on the diabetes drugs Humalog and Humulin have already expired, but they are biologic drugs without generic competitors.
  • Yes, but: Lilly had a 17% profit margin in the latest quarter. The company is not hurting for cash.
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