GlaxoSmithKline Replaces Head of Struggling U.S. Operations

Published: Feb 18, 2015

GlaxoSmithKline (GSK) Replaces Head of Struggling U.S. Operations
February 17, 2015
By Mark Terry, Breaking News Staff

U.K.-based GlaxoSmithKline announced yesterday that Deirdre Connelly, president of its U.S. pharma operations, will retire and be replaced by Jack Bailey. Bailey was most recently senior vice president for policy, payers and vaccines. The change is effective immediately.

The company reported a drop of 3 percent in its total revenue in 2014 to £23 billion. Pharmaceutical and vaccine sales in Emerging Markets grew by 5 percent and 1 percent in Japan, but European sales were flat. In the U.S., sales dropped by 10 percent, primarily related to formulary and contract changes to Advair. The company also indicated that globally, Seretidel/Advair sales were expected to drop in 2015 because of sustained price pressure in the U.S. and Europe, as well as generic competition.

In the recent announcement about the changes in U.S. management, Abbas Hussain, GSK’s head of global pharmaceuticals wrote, “The U.S. marketplace has changed significantly, with an exceedingly competitive payer landscape. As a result, the entire sector is facing new challenges due to pressures on price and access.”

The company has been undergoing major changes in the last year. In April 2014 the company announced a joint venture with Swiss-based Novartis AG to create a consumer healthcare business. Novartis acquired GSK’s oncology products for $14.5 billion, with an additional $1.5 billion upon meeting various milestones.

Also as part of the deal, GSK paid $7.1 billion and royalties for Novartis’ vaccines business, except for its influenza vaccines. The joint venture is expected to create about $10.9 billion in annual sales.

Bailey will be in charge of a restructuring initiative in the U.S. This could result in cuts of up to 900 jobs at its Research Triangle Park, N.C. research and development campus. Bailey is expected to spearhead the company’s long-acting beta agonist (LABA) and long-acting muscarinic antagonist (LAMA) drugs for treatment of respiratory diseases like chronic obstructive pulmonary disease (COPD) and asthma.

Connelly led the company’s U.S. business after a $3 billion settlement with the U.S. Department of Justice in 2012 for abuse of marketing practices. “Deirdre played a major role in stabilizing our U.S. business,” said Hussain, “establishing GSK’s industry-leading approach to incentivizing sales representatives and rebuilding trust with customers.”

GSK employs about 99,000 people in 115 countries. In the U.S., it employs about 17,000, mostly at its facilities at North Carolina’s Research Triangle Park and in Philadelphia. Connelly worked from the Philadelphia locations. Bailey works at the North Carolina headquarters.

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