Mumbai: Facing a Setback in its business turf, one the largest manufacturers of medicines in the country Lupin Ltd is taking steps to rationalize its research operations, and was recently seen laying off as many of its employees at Pune. The firm will witness a business transition from making plain generic drugs to more complicated and speciality products, a move which will lead to exit of more than 60 employees according to certain media reports. The exact numbers of employees which would be terminated is currently not disclosed.
According to recent media reports, pricing pressure and a challenging US market have prompted the pharma giant to discontinue employment of more than 60 employees from Research and Development(R&D), chiefly derma formulation, analytics and active pharmaceutical ingredients (API) research.
Industry experts are of the opinion that companies restructure pipelines, cut down R&D budgets and terminate staff to tide over tough times.
Lupin has 1700 scientists across nine research and development centres in different countries including two in India, at Pune and Aurangabad.
Confirmation to the same was given as a Lupin spokesperson told BusinessLine, “The US generic market has gone through significant changes in the last few years and we wanted to optimise our research structure in line with our future pipeline. These (job) cuts were necessary in line with the changes in the market place. In that, we have also re-deployed a good number of scientists in functions which we are expanding. We took a long term view on the research pipeline in doing this exercise and we do no anticipate further cuts.”
However, the company’s representative did not put a number to the employees who were impacted by this exercise, and also, did not confirm industry information doing the rounds that fixed the number of employees being terminated at 60, across segments including dermatology and APIs.
As per the daily, the streamlining exercise currently being carried out at Lupin was possibly the last leg. A similar rationalization had been undertaken in 2018 as well, where the company had let go of about 50 people.
The domestic pharmaceutical sector has been undergoing stiff headwinds over the last few months, with margins of most drug companies under pressure, bogged down by price erosion in US businesses and regulatory issues affecting major companies. To double the trouble, their domestic businesses are also impacted by the implementation of Goods and Services Act.
“Research is a key driver of our growth and we are committed to investing in our focus areas of generics, complex generics (including areas of inhalation and complex injectables), APIs (Active Pharmaceutical Ingredients), biosimilars, speciality and drug discovery”, said Lupin.
Speaking to TOI, a company official told that majority of employees who were asked to leave were serving junior functions. Lupin is not shutting down its R&D unit, he stated, adding, “We are rationalising the early-stage drug discovery programme to focus on other near-term and mid-term opportunities for Lupin — complex generics and speciality. This does not have any impact on our late-stage developments — from our novel drug delivery system (NDDS) pipeline — which continue as such.”
According to the daily, the company will continue to focus on the late-stage developments from their NCE pipeline. “We currently have three compounds in Phase II clinical trials. We will continue to focus on select high-value early-stage NCE (new chemical entity) opportunities also”, he added.