Merckantile Paralysis

Some time ago, BrooklynDodger conversed with progressive friends about drug prices. The Dodger argued that if price controls were imposed on drugs, and cash flow fell, then Big Pharma would just reduce research and development, and production, and put the money into promotion. The full text reveals that beyond manufacturing the cuts will come from research and development.

The alternative to price controls, the Dodger argues, was establishing a public funded set of entities which would bring drugs to market, not just develop the principles on which the drugs are based.

The cuts described below are not out of line with what's coming down in the auto industry. It's just that compensation - union contracts - are not out front in Big Pharma because of no unions. But these are coming from a company that is making money hand over fist.


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http://www.washingtonpost.com/wp-dyn/content/article/2005/11/28/AR2005112800190.html

Merck to Eliminate 7,000 Jobs, 5 Plants

By LINDA A. JOHNSON

The Associated Press
Monday, November 28, 2005; 5:33 PM

TRENTON, N.J. -- Drugmaker Merck & Co., squeezed by Vioxx lawsuits, tumbling revenues and other troubles, is eliminating 7,000 jobs and five production plants and revamping manufacturing in the first phase of a global reorganization. The long-awaited announcement Monday drove Merck shares down more than 4 percent.

The restructuring of manufacturing, supply chain and research operations, meant to lower pretax costs by $3.5 billion to $4 billion through 2010, includes immediately starting to cut 11 percent of Merck's work force, with 60 percent of the reductions in manufacturing. The rest of the job cuts _ the third round announced since October 2003 _ are to be spread across the company, with about half in the United States.

Merck & Co. said it will cut about 7,000 jobs, or 11 percent of its work force, by the end of 2008 and close or sell five of its 31 manufacturing plants to generate savings of up to $4 billion. (AP Photo/Daniel Hulshizer, File) (Daniel Hulshizer - AP)