Beasley, Allen, Crow, Methvin, Portis & Miles, P.C.

The cholesterol-fighting drugs Zetia and Vytorin, blockbuster drugs that once represented multi-billion dollar sales for Schering-Plough and Merck, now seem to be squeezing the pharmaceutical giants.

One recent clinical study revealed that Vytorin and Zetia are no more effective than generic statins, which cost about half as much. Another trial suggested a link between Vytorin and increased risk of developing and dying from cancer. Prescriptions plummeted and along with them, company revenues. Government inquiries about the release and apparent manipulation of clinical data are amounting to a public relations debacle.

Today, Schering-Plough announced that it will eliminate 1,000 positions from its 5,000-rep sales force. The cutbacks are part of a 10 percent reduction of Schering-Plough’s general workforce, which the company announced last April. Altogether, the cuts represent $1.5 billion in savings. Schering-Plough’s purchase of Organon Biosciences for $14.4 billion is another key factor in its decision to cut back and reorganize its workforce. Interestingly, in a statement to the Associated Press, Schering-Plough says the cuts are designed to improve the company’s customer relations.

Merck announced back in May that it was cutting 1,200 sales reps from its work force, on top of already 8,100 additional positions slashed in 2005. Ken Frazier, president of Merck’s global human health unit, issued the following statement regarding the cuts:

“With eight successful launches of Merck products approved in the US since 2006 now behind us, and with an unexpected delay in a new product approval, we decided to accelerate the achievement of efficiencies we anticipate gaining as we transition to our new commercial model in the US.”

Online translation utilities don’t yet include CEO-speak to English, but I’m fairly certain Mr. Frazier’s statement translates to “Merck needs money.”

This entry was posted on Tuesday, September 23rd, 2008 at 8:45 am and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.