Facing the loss of exclusivity on patents, Merck & Co., Inc. (NYSE:MRK) is laying off another 8,500 workers, just a month after the pharmaceutical giant pink-slipped 7,500 employees.
The Whitehouse Station, N.J., company is expected to reduce its global workforce of 81,000 by about 20 percent as it takes on restructuring costs of between $2.5 billion and $3 billion, including $900 million to $1.1 billion in 2013, a majority of which will be recorded in the third quarter. The company hopes to save about $2.5 billion a year by the end of 2015.
Merck, like many of its rivals, has been losing exclusive patents on a number of drugs since the so-called “patent cliff” of 2012. Analysts told International Business Times even more licenses are expected to expire in 2015.
For Merck, the real damage came with the recent loss of a patent on its allergy and asthma drug Singulair, which has already been a drag on revenue.
Gone are the TV commercials that appeared throughout the mid-2000s, urging allergy sufferers to ask their doctors about Singulair. Gone, too, are the funds for expanded research into something new to replace it.
Merck is cutting staff from the marketing department and from research and development.
The company also took a hit when its animal-feed additive, Zilmax, was linked to leg weakness in cattle. Several livestock-trading bodies banned cows fed the drug last month.
Alexander C. Kaufman is a reporter at the International Business Times covering companies, retail and media. He joined in May 2013. Previously, he was an editor of...