These newest job cuts come on top of cutbacks that Merck made as part of an earlier restructuring program. Merck began eliminating 10,400 jobs from its global workforce in 2005 and completed that set of cutbacks last month.

Merck’s Chief Executive, Richard Clark, acknowledged the company faced a challenging economic environment in the immediate future.

“Our current sales trends for key products, compounded by known industry and emerging economic factors, have led us to reassess the environment in which we expect to be operating between now and 2010,” he said in a statement.

According to Merck, the 12-percent reduction of its workforce translates to 6,800 employees losing their jobs and some 400 vacancies that will go unfilled. The measures should amount to a savings of $3.8 billion to $4.2 billion by the end of 2013, the company said.

Merck’s embattled cholesterol drugs Vytorin and Zetia continue to earn the company profits, but those profits continually fall as concerns over the drugs’ safety and efficacy rise. Studies have indicated that Vytorin is no more effective than cheap generics and that using it may increase the risk of developing cancer and dying from cancer.

Negative press has knocked Vytorin and its component Zetia, which is also prescribed separately, down from blockbuster status to something more of a financial and legal liability.

SOURCE: Vytorin Recall › Merck cuts more jobs as Vytorin, Zetia sales drop

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.”

SOURCE: Vytorin Recall › Vytorin, Zetia squeeze manufacturers