GlaxoSmithKline's Move A Testament That Pharma Companies Are Turning Focus Away From U.S.

The pharmaceutical sector is going through a major transformation with companies looking to increase shareholders’ value by focusing on their core strengths and strengthening their drug pipeline rather than M&A deals. However, GlaxoSmithKline plc (ADR) GSK is taking it a step further by axing jobs and going on a major cost-cutting drive.

CNBC's Catherine Boyle recently reported on Glaxo’s plan of axing hundreds of jobs from its U.S. operations as part of its $1.6 billion cost-cutting program.

"GSK has already announced that they have a plan to reduce 1 billion pounds in costs over the next three years. This is being driven by declining sales of their Advair product particularly at the U.S. business, and of course general decline in the business in the U,S. They have got a lot of pricing pressure there," Boyle said.

"This just shows you just how much these big pharmaceutical companies are having to move away from the traditional focus in the U.S., which for decades has been by far the biggest market and looking at emerging markets to try and to bring new products for over there."

When asked about whether the U.S. market still is as important to pharmaceutical companies as it has been in past, Boyle said, "Well of course, U.S. is as I said by far the biggest market, but you have got in terms of growth you have really got to look to the developing world and […] the process of changing disease shape in the developing world is accelerating much quicker than it did in Europe and U.S."