If you’ve been following my pharma news feed over at BNET, you will have seen this story about Sepracor’s not-very-successful cost-cutting drive.
The bottom line: The company laid off 300 sales reps and still somehow managed to decrease revenues, increase expenses, and lower the efficiency of its reps. The company claimed to investors that the opposite was the case.
I know what you’re all asking: Isn’t there a cute powerpoint chart with pink and blue lines that depicts this disaster?
Yes there is. See below. (And if you’re late to this series, start here and click your way backward.)
August 14, 2008 at 7:49 am
My guess is that the company was looking to cut fat, and marketing is usually an easy target (as it is often the easiest to cut department in most drug companies), but had they done a closer analysis of their expenses, they might have found other areas which have lower efficiency ratios. One area which is often bloated but seem as vital is R&D. OK, no argument there. But are they looking at the senior executives? I would guess not, but the Board (assuming they aren’t puppets for executive management) probably should be!