ET Bureau Aug 03, 2019, 10.48 AM IST

MUMBAI: In a bid to rationalise costs, drug major Sun Pharma is shutting two units at its Vadodara-based R&D centre, terminating employment of around 85 scientists. The scientists were engaged in the clinical pharmacology unit, which is part of R&D operations. 

Sources said the company’s R&D centre at Gurgaon (started by erstwhile Ranbaxy) will now undertake the clinical research handled by the Vadodara facility, while the rest of the research operations will continue at the Vadodara unit. Over the years, drug companies — including Lupin and Piramal — have undertaken a rationalisation exercise to cut costs. They either reduced or shut their innovative and specialised research operations to protect margins in an industry that is showing signs of a slowdown.

At present, Sun Pharma employs around 2,000 scientists across six major centres located at Vadodara, Gurgaon, Mumbai, Israel, Canada and the US. The company’s R&D spend as a percentage of sales reduced to 6.9% in FY19 from 8.6% in the previous fiscal. 

A Sun Pharma spokesperson said, “While we continue to make investments in our R&D operations, we also constantly evaluate our resources and future capacity requirements to bring in efficiencies in cost and processes. To ensure optimal utilisation of clinical pharmacology units (CPUs) that conduct bioequivalence studies, we are discontinuing operations at two centres at Tandalja and Akota, Vadodara. The bio-equivalence studies from these centres will be transferred to our other facilities. We are offering full support to the affected employees and helping them with outplacement services.” 

Sources said the employees had no prior intimation about termination of their services and learnt about it when they reported for work on Friday. Three months’ salary will be given to those who lost jobs.