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Pfizer's Sandwich closure is the latest in a string of downsizing plans proposed by pharma. In 2009 alone, major pharmaceutical players announced expected layoffs that would axe more than 40,000 positions the world over (Table 1). The reasons for the downsizing include outdated research models, a raft of blockbuster drugs facing patent expiration, numerous layers of bureaucracy, a perception that internal R&D has underperformed in terms of innovation, but mainly, it boils down to the balance sheet.
The drug industry research firm Datamonitor predicts the 'patent cliff' facing pharma beginning this year could cost big pharma $42 billion in US branded sales between 2011 and 2012, and New York–based Pfizer is a leading example: its blockbuster Lipitor (atorvastatin) pulled in $11.8 billion in 2010 worldwide sales, but the drug is due to lose patent protection in November. This is partly why, in the same announcement as the Sandwich closing, Pfizer said it would cut R&D spending up to $1.5 billion for the next fiscal year. It will also be cutting 1,100 jobs from its Groton, Connecticut site (although several hundred jobs would be relocated to or newly created in its Cambridge, Massachusetts site).