Sector News

Merck cuts 112 jobs in Florida plant shutdown

October 6, 2016
Life sciences

Merck & Co. will shutter a manufacturing plant in Florida, cutting 112 jobs in the process, according to a notice filed with the state.

The shutdown comes as Merck continues to shrink its manufacturing network, which ballooned in size with its 2009 buyout of Schering-Plough, and as other Big Pharmas continue to shut down or sell facilities to save money and revamp their production networks.

“The closure of the facility arises from the company’s ongoing review of global manufacturing capacities needed to support our redesigned operating model, with a significantly reduced and more flexible cost structure,” Merck spokeswoman Lainie Keller said in an emailed statement.

After its Schering-Plough merger, Merck had 90 plants on its hands and began paring away soon after. Merck said last August that, out of 36,000 positions set to be cut after that deal closed, it had 2,585 jobs left–and most of those remaining cuts would hit manufacturing. The company was in the process of selling two plants at the time, one in Italy and another in France.

It had already closed or sold several facilities in Ireland and Puerto Rico, some of them to companies that kept Merck’s workers on staff. The company was able to shed 600 jobs with three plant sales, for instance.

The Florida job cuts will begin Nov. 15 and take place in two waves, one that month and one in December. Two employees will remain at the plant until mid-2017 to wrap up the closure. Workers there can apply for jobs elsewhere at Merck, and they’ll receive severance packages, the company said.

After waves of major layoffs in sales and marketing early this decade, drugmakers have increasingly been turning to their manufacturing footprints for savings. Megamergers such as Merck’s Schering-Plough deal have played a role, but so have shifts in focus–biologic drugs versus small molecules, for instance–and increased use of contract manufacturing, among other things.

AstraZeneca, for one, said in May that it would “reshape” its manufacturing base as part of a $1.5 billion cost-cutting plan, aimed at retrenching as the company faces generic competition for its blockbuster statin drug Crestor. The company said it would cut in some areas and build up in biologics, which require a much more complex production process.

Novartis is also in the midst of a manufacturing shuffle; after hiving 25 plants over the past few years, the Swiss drugmaker said in January that it would reorganize what’s left into a streamlined, centralized network, in hopes of saving big money. The company hopes to implement new technology and techniques, such as continuous manufacturing, as part of that restructuring.

Smaller companies are in on the manufacturing slimdown, too; after some “previously unanticipated headwinds,” the specialty pharma Endo said in May that it would slash 740 jobs in North Carolina and Alabama, with one plant closing altogether.

By Tracy Staton

Source: Fierce Pharma

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