Merck Adds to Industry-wide R&D Cuts

Merck is finally revealing details of the deep cuts it planned to make in its organization following its acquisition of Schering-Plough. We thought this would be a good time to remind readers of the extensive R&D cuts the pharmaceutical industry has made in the last two years. One has to wonder what will be left to trim during the next round of cost-savings efforts. For a more complete chart that shows how this process started back in 2008, see here.

2009:

January: Pfizer buys Wyeth, plans to eliminate 15% of the combined workforce of about 128,000.

March: Merck acquires Schering-Plough, plans to cut 15% of combined workforce of 106,000.

April: Sanofi-Aventis overhauls its pipeline. Research on 14 drug and vaccine candidates, including seven in Phase II or III trials, is discontinued.

September: Lilly reorganizes into five units—oncology, diabetes, established markets, emerging markets, and animal health—and plans to eliminate 5,500 jobs, or nearly 14% of employees, by the end of 2011.

November: Pfizer plans to shutter six of its 20 research sites to reduce overall lab space by 35%. Research will end in South Brunswick, N.J.; Chazy and Rouses Point, N.Y.; Sanford, N.C.; and Gosport and Slough, England. Roughly 1,300 researchers work at the locations earmarked for closure.

2010

January: GSK proposes ending R&D at several sites, including Tonbridge, England; Verona, Italy; Zagreb, Croatia; and Poznań, Poland. Preclinical development ends in Mississauga, Ontario, and neurosciences drug activity closes in Harlow, England.

February: AstraZeneca plans to cut 8,000 jobs on top of the 15,000 positions targeted for elimination between 2007 and 2009. The company drops 20 compounds from development and ends discovery research in 10 diseases and most vaccines. It will close sites in Leicestershire and Cambridge, England, and Lund, Sweden, and end discovery research in Wilmington, Del.

May: Takeda plans to cut 1,600 jobs from its North American operations, including 20% of staff at its Lake Forest, Ill., R&D center.

July: GSK sells its Verona, Italy, site to Aptuit, transferring 500 staff—almost all graduate-level scientists—to the contract research organization.

July: Merck says it will cut exit operations at eight R&D sites and eight manufacturing sites as part of its previously announced plans to shed 15% of its combined workforce following the acquisition of Schering-Plough. R&D facilities to be phased out over the next two years are: Montreal, Canada; Boxmeer (Nobilon facility only), Oss, and Schaijk, Netherlands; Odense, Denmark; Waltrop, Germany; Newhouse, Scotland; and Cambridge (Kendall Square), Massachusetts, U.S. Manufacturing facilities affected include sites in Comazzo, Italy; Cacem, Portugal; Azcapotzalco, Mexico; Coyoacan, Mexico, and Santo Amaro, Brazil. The Mirador, Argentina, and Miami Lakes, Florida, facilities will be sold. Chemical manufacturing will be phased out at the legacy Merck site in Singapore, but the legacy Schering-Plough site there will continue operations.

Author: Lisa Jarvis

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