WHITE HOUSE STATION, N.J., Nov. 28 (UPI) -- Merck said Monday it will launch a major restructuring, initially saving $3.5 to $4 billion pretax, and cutting 7,000 jobs.
The Whitehouse Station, N.J.-based firm said the plan also calls for the closing or sale of five of 31 manufacturing facilities. The plan should yield the estimated savings beginning in 2006 through 2010, Merck said.
A significant portion of the total savings through 2010, or about $2 billion, will result from implementation of the company's new MMD supply strategy, Merck said.
The company estimated that the manufacturing-related savings should allow the drug firm's gross margin beyond 2008 to return to levels consistent with those of the period prior to the loss of U.S. market exclusivity for its top-selling drug Zocor.
The firm noted that the costs associated with the restructuring should be complete by 2008. Merck said the sweeping changes are aimed at reducing costs, increasing efficiency, and enhancing competitiveness.
The move was prompted largely by Merck's need to cut costs in the face of nearly 6,500 personal injury lawsuits pending against it, based on the firm's withdrawn arthritis drug Vioxx.
