Tough Sledding for Merck

October 24th, 2008 | Sources: Wall Street Journal, WSJ Health Blog

After reporting a 28% decrease in Q3 net income, pharmaceutical giant Merck & Co. announced it will cut 7,200 jobs over the next 3 years. This amounts to 12% of its workforce and it comes on top of 10,400 job cuts the company has made during the last 3 years.

Merck said workforce reductions will coincide with the shuttering of research facilities in Seattle, Italy and Japan. Executive positions will be reduced by 25%. 40% of the reductions will involve US-based employees.

CEO Richard Clark indicated the moves were part of the company’s plans to reengineer its R & D, manufacturing and sales processes. “New business models have to be put in place for our industry to survive,” he told the Wall Street Journal.

Merck’s Q3 sales dropped 2% to $5.9 billion. The company attributed the fall to decreased revenue from three key drugs: Gardasil, a cervical cancer vaccine, Vytorin, a cholesterol-lowering drug whose effectiveness has been questioned, and Fosamax a bone mineralization drug that faces generic competition in the US. Merck also cited the economic downturn as a cause of its troubles. The Great Economic Crisis of 2008 has triggered a nearly unprecedented drop in US health care consumption.

Merck did report sales growth for its diabetes drugs, Januvia and Janumet. Sales of the former increased 250% to $379 million. Sales of the latter increased 500% to $101 million.


 

Add Your Comment

You must be logged in to post a comment.

We just want the site to look nice!
  • Comment Policy


    Pizaazz encourages the posting of comments that are pertinent to issues raised in our posts. The appearance of a comment on Pizaazz does not imply that we agree with or endorse it.

    We do not accept comments containing profanity, spam, unapproved advertising, or unreasonably hateful statements.



























Contact us if interested