Employees at global pharma giant Pfizer allege it is cutting its work force in India by insisting they take a voluntary retirement scheme (VRS).
The said scheme appears to cover its field force, as well as managerial staff. The company has offered the VRS to at least 270-300 workers so far, sources said.
According to them, this is notable as it comes within days of another pharma major, Novartis, losing its patent case for its anti-cancer drug, Glivec, in the Supreme Court. On April 1, the Supreme Court had denied the patent claim of Novartis. Sources added Pfizer has asked selected field staff and managers to resign, offering them basic payment of a few months as compensation.
A Pfizer spokesperson declined to give a direct response on the downsizing and did not confirm the numbers. He said as part of a recently concluded strategic business plan, it had evaluated its business to ensure that the company "best maximises performance and optimises resources".
He added the company aims to allocate resources and people to the areas that best serve its patients and customers. “In line with this approach, we have recently realigned our field force after a rigorous review of our structure and competencies required for the future,” said the spokesperson.
Leaders from the Federation of Medical Representatives Association of India (FMRAI), a trade union for the medical representatives and sales promotion employees, said they had come to know about the downsizing and informed its members not to resign even if there was pressure.
Union leaders, however, are of the opinion that the retrenchment might not be in connection with the result of any patent litigation. According to them, it is part of a realignment of the company’s existing divisions to improve its performance in India.
“The estimation, based on what we heard, is that around 270 employees, 200 field staff and 70 managers, were so far asked to leave job,” said Aloke Ganguli, vice-president, FMRAI. There are around 2,500 field staff in Pfizer, Ganguli added. He said many of the field staffers were called on between April 3 and April 6 and given basic payment of a few months to leave the job.
“They did not give me any option. They said the company is realigning its divisions and is choosing people randomly. I’ve heard around 300 people have lost their jobs," said a worker who received VRS from the company. He added the downsizing has been happening for at least a year.
“It’s not surprising if they are downsizing their field staff,” said Siddhant Khandekar, chief manager, research, ICICI Direct. According to him, large multinational pharma firms, except Glaxo Pharma, are not able to replicate their global success in India.
Besides, the new pharma policy, which is expected to come into effect any time now, would even compel some of the multi national coporations to make some price cuts for their products which have a high premium, compared to the next competitive product in India. “They might rethink about their launches and new strategy,” Khandekar added.
According to a PricewaterhouseCoopers report, the Indian pharmaceutical sector would touch $74 billion in sales by 2020. The country is currently among the top five of the pharmaceutical emerging markets.