Lilly To Freeze Pay Raises For Most Employees

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Two months after disclosing plans to lay off more than 1,600 sales reps, Eli is now planning to suspend base pay for next year and reduce employee bonuses that are paid in 2015 in a cost-cutting move that is designed to save some $ 400 million through 2016, Reuters writes. 

The move comes as the drugmaker faces significant competition from low-cost generics. The patent on the Cymbalta antidepressant, which generated $ 4 billion in global sales last year, expires in December and then next year, the patent on the Evista osteoperosis treatment, which notched $ 1 billion in sales last year, expires in March 2014. Two years ago, the patent on the Zyprexa antipsychotic expired

“This is a difficult, but necessary decision,” a Lilly (LLY) spokesman tells Reuters. “We continue to face the most significant challenges in our history. While we’ve taken many actions to reduce costs and become a leaner organization, we must do more.” He added, however, that Lilly employees will be eligible for base pay increases in 2015.

What remains unclear is which employees will be exempt from the pay and bonus reductions. We asked Lilly for comment and will update you accordingly. 

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