450 Jobs Eliminated as Novartis Shuts Down Colorado Facility

Switzerland-based Novartis is closing its generic-drug manufacturing facility in Broomfield, Colo., which will cut 450 jobs over two years.
 
The facility’s operations, which are under Novartis’ Sandoz division, will be transferred to Wilson, N.C., and is expected to be finished in the fourth quarter of 2019. The company stated that “double-digit price erosion caused by customer consolidation and increased competition taking place within the U.S. generic drug market” led to above-average pricing pressure in the U.S. “While this was a strategic choice made to optimize our manufacturing infrastructure, it was a very difficult decision as the closure affects approximately 450 employees at the Broomfield site.”
 
The Broomfield facility manufactures oral solid drugs. Tim Willeford, a spokesman for Sandoz, told in-Pharma Technologist, “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. 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.”
 
About half of Broomfield’s products were no longer viewed as competitive, and as a result will be discontinued or divested. Those drugs are typically oral generics for cardiology, central nervous system (CNS), endocrinology, respiratory and pain indications. “They show limited growth, are expensive to make, and are in a highly competitive market where other treatment options exist,” Willeford told in-Pharma Technologist. “Combined with increasing pricing pressures in the U.S., it is not profitable to continue making these products.”
 
Last year, Novartis described plans to restructure and consolidate its network of manufacturing facilities. This included the development of a cross-divisional Technical Operations organization. These changes were expected to create savings up to $1 billion 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 told in-Pharma. “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 operates 67 manufacturing sites, 40 under the Sandoz division. The company employs more than 23,000 people at 24 locations in the U.S. and 133,400 staffers worldwide.
 
Broomfield officials were disappointed. Broomfield has a population of about 65,065, a subdivision northwest of Denver. Bo Martinez, Broomfield’s economic development director told the Denver Post, “They’ve been such a big business for Broomfield for more than 40 years. We will continue to work closely with Sandoz, Inc. and Novartis to reposition this asset and explore all options as it relates to the Broomfield site and the impacts to its 450 employees in Broomfield.”
 
Sandoz will offer severance packages and job placement assistance, Sandoz indicates, and associates can apply for other open positions at Novartis.
 
The property in Broomfield was assessed at $13.5 million in 2017, and Sandoz, Inc. of Dallas is listed as the property owner. Sofina Mirza-Reid, a Novartis spokeswoman, told the Broomfield Enterprise, “As with any business strategy, we assess all options. Options—including divestment—will be considered.”