Merck to cut 1,200 sales jobs after setbacks

Merck & Co. Inc. announced today that it would cut 1,200 sales jobs across the country after recent product delays and as part of an ongoing restructuring drive.

Merck declined to say how many, if any, job reductions would come at its manufacturing and research facility centered in West Point, Montgomery County, or at its pharmaceutical sales and marketing headquarters in Upper Gwynedd.

Merck employs about 12,500 people in the Philadelphia region, most of them in Montgomery County.

"Our field salespeople are located throughout the United States," Merck spokeswoman Amy Rose said. "That's as specific as we are going to be."

While some field-sales employees may work in the Philadelphia territory, Rose said, "I can't speculate."

Employees will be notified by the end of this month. The cuts will be completed by the end of July.

"I'm not at liberty to provide any breakdowns. I can tell you that Upper Gwynedd is our U.S. marketing headquarters, responsible for the sales and marketing of pharmaceuticals in the U.S.," Rose said. "The global vaccines and infectious-diseases business is also headquartered in the area."

Merck is the latest big drug company to trim jobs as blockbuster medicines have lost patent protection, less-expensive generic competitors have come on the market, and new products face regulatory delays. The flow of new products in the company's pipeline to replace sales also has slowed.

GlaxoSmithKline P.L.C. and Wyeth, with major pharmaceutical operations in the Philadelphia area, have announced plans to cut jobs in recent months.

For Merck, this would be the second major retrenchment in less than three years. In November 2005, the company began a restructuring drive that resulted in the elimination of about 8,100 positions and the closing of five plants worldwide.

Merck's job reductions come after the Food and Drug Administration on April 25 rejected a combination asthma-allergy drug that would have combined two best-selling drugs - Claritin from Schering-Plough Corp. and Merck's Singulair - into one tablet. Last Monday, the FDA rejected Merck's new cholesterol drug Cordaptive, and on Wednesday the agency issued a warning letter to Merck to fix manufacturing violations at its vaccines plant in West Point.

Kenneth Frazier, president of global human health, said that Merck had successfully launched eight medicines and vaccines since 2006, and that it now would implement layoffs to optimize costs and "improve effectiveness and efficiency" across all aspects of the company's business.

"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 U.S.," Frazier said.

Merck shares closed down 39 cents at $38.98, but rose in after-hours trading on the New York Stock Exchange.