When a pharmaceutical company mistakes a placebo for a panacea, it is in trouble. Roche , the Swiss drug company that is struggling with disappointing sales and a cupboard bare of new products, said Wednesday that it will cut 3,000 jobs over the next two to three years in a bid to reap cost savings. The company declined to forecast just how much in cost savings, leaving investors and analysts in the dark, but said the cuts would include 550 jobs from its U.S. sales force.
Investors usually love it when a company decides to fire people.
They think it is an act of a hard-nosed management that is rolling up its sleeves. But the drug industry is one of the exceptions. In pharmaceuticals, you have to spend it to make it. Having long outsourced basic science to academia and governmental organizations, they are now increasingly letting the biotechnology industry do the later-stage research and development. What Big Pharma has left is regiments of soldiers who drop free samples on offices, take doctors out to swanky dinners, and otherwise sing the praises of medicines that all too often have few benefits over rival products.