By Park Ji-won
Multinational pharmaceutical companies operating in Korea are adopting early retirement programs (ERP) to cut jobs as part of a restructuring program amid sluggish sales.
Janssen Korea, Johnson & Johnson’s Korean pharmaceutical unit, said it planned to shed 50 jobs, or 10 percent of its employees, with a voluntary retirement program.
The Korean unit of Boehringer Ingelheim and Lilly conducted ERPs in October and November, with Roche also cutting jobs recently.
Pharmaceutical companies have suffered a business slump, hit by falling drug prices amid the government’s move to bring down medicine costs.
“The Korean government’s recent move to cut pharmaceutical prices has negatively affected pharmaceutical companies’ profits,” a drug company official said.
A market insider said, “The ERP is an easy way for multinational companies to cut jobs, mainly in their sales divisions. It’s far from boosting competitiveness, however.”
Also, the expiry of patents, which affects pharmaceutical companies’ revenues, is another factor behind their large-scale job cuts.
“If a company’s original product patent expires, the product price goes down, undermining the patent owner’s competitiveness and marketing power,” another pharmaceutical official said.
Meanwhile, officials have said that several foreign pharmaceutical companies locked in disputes with labor unions over the ERP would find it difficult to carry out their programs.