Merck - Here come the cuts to pay for Vioxx

Merck & Co. Chief Executive Richard Clark said a statement would come "soon'' on a restructuring plan he's worked on since taking the job in May, and he wouldn't comment on a report it will include thousands of job cuts.

Clark, in a telephone interview today, declined to comment on a Nov. 26 report in the Wall Street Journal that Merck will cut jobs, close plants and trim research costs.


He said he was "very unhappy'' with the story and wouldn't discuss it as "a matter of principle.'' "The problem with an article like that is that we haven't had time to talk to employees,'' Clark said. "We're very unhappy. We want to tell our employees first. The announcement will be soon,'' he added.

Ah, but he doesn't deny its truth!

Last month, Merck cut 825 jobs worldwide.

Merck, the No. 3 U.S. drugmaker, faces billions of dollars in liability from 6,400 lawsuits filed against the company over its recalled Vioxx painkiller. The Whitehouse Station, New Jersey-based company is also preparing for sales declines from its Zocor cholesterol drug, which loses patent protection next year, and Fosamax osteoporosis treatment, off patent in 2008.

Although Vioxx litigation is in the news nearly every day, Clark spends only an hour a week on Vioxx, he told investors recently. On Tuesday, the third Vioxx trial is set to begin, this time in a federal court in Houston.

Insiders' view: Inevitable, once Mercks' involvement with BMSs' Pargluva hit the rocks as well. The timing could not be worse for people; it's going to be a worrying Christmas for many.

It will be interesting to see if Merck cut R&D. If yes, then it will be the exact opposite strategy to GSK who plan to increase R&D spending.

http://pharmagossip.blogspot.com/2005/11/gsks-boss-nurturing-rd.html

Source: Bloomberg