I was sad (though not surprised) to hear of JnJ’s pending layoffs. I have friends who work there. However, the thing that really caught my attention in this article is that the cost to develop a new drug has moved from US $800 Million to US $1.3-1.5 Billion in just a few years. I don’t have a lot of time to expound on this, but thought it worth flagging.
NEW YORK (Reuters) – Johnson & Johnson plans to cut up to 7 percent of its workforce in order to generate cost savings needed to finance increasingly costly drug research and to weather future challenges, the diversified healthcare company said on Tuesday.
J&J said the planned restructuring will eliminate 7,000 to 8,000 jobs and generate annualized cost savings of $1.4 billion to $1.7 billion by 2011…..[snip]
The typical cost of developing a new medicine has now climbed to between $1.3 billion to $1.5 billion, from a cost of $800 million only a few years ago, Weldon said. He noted that J&J and other drugmakers increasingly are partnering with rival companies in order to share such financial gambles…..[snip]