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Beleaguered Merck Cuts Sales Jobs

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The Associated Press

Published: May 7, 2008

TRENTON, N.J. - Merck & Co. plans to eliminate 1,200 U.S. sales jobs, a move that comes a week after federal regulators' surprise rejection of an experimental cholesterol drug heavily touted by the pharmaceutical company.

The cuts come on top of the elimination of about 8,100 positions under the sweeping restructuring plan announced in December 2005, Merck's declared "Plan to Win."

The new cuts are to be completed by the end of July, with employees of the Whitehouse Station, N.J.-based company being notified by the end of this month. "It isn't a message that you want to send," WBB Securities analyst Steve Brozak said. "If they didn't have a morale problem now, they certainly will."

The cuts amount to nearly 15 percent of the 8,500 sales jobs Merck had at the beginning of 2007, spokeswoman Amy Rose said Monday.

The cuts are attributable to the Food and Drug Administration's rejection last week of a new cholesterol drug called Cordaptive that Merck had hoped would reinvigorate its key cholesterol franchise. In addition, Rose said, Merck has successfully completed the launch of eight medicines and vaccines in the United States since 2006 and now is scaling back the number of salespeople devoted to those drugs.

Kenneth Frazier, president of Global Human Health at Merck, said in a statement that the step is part of continuing efforts to improve the company's efficiency.

Merck is not the only drugmaker letting sales representatives go.

At the end of March, Madison, N.J.-based Wyeth dismissed 1,200 sales reps as sliding sales of former blockbusters make many reps redundant. And late last month, Johnson & Johnson of New Brunswick, N.J., said it is eliminating about 400 U.S. sales jobs by year's end because sales of a key drug have been hurt by safety problems.

Merck has been enduring a string of setbacks over the past 11 days, including the FDA rejecting the company's proposed allergy drug that combined the active ingredients of Merck's Singulair and Schering-Plough Corp.'s Claritin, which is available without prescription. On April 30, the FDA publicly demanded that the company clean up problems at its main vaccine plant.

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