Rumours are rife that US drug giant Merck & Co is planning a major refurbishment of its business. According to the Wall Street Journal, which cited a person close to the situation, the restructure of the firm’s business could involve shedding thousands of jobs, but specific details are expected to be unveiled early this week.
The move will come as no great surprise to industry observers, as Merck’s current path through turbulent waters is forcing the group to seek means of improving business outlook, primarily by cutting costs and honing its research focus. Last month, the drugmaker announced that it would cut 825 jobs worldwide after reporting a 2% drop in third-quarter revenues.
Things for Merck took a turn for the worse last year, when it has to pull its painkiller Vioxx (rofecoxib) from the market on evidence that it significantly increases the risk of heart attack, sparking a myriad of liability suits that some analysts fear could cost the group up to $50 billion.
Merck now faces 6,400 individual lawsuits, plus 160 class action suits, with its first trial in a federal court due to begin later on this month.
The restructuring had been widely anticipated after the appointment of new chief executive Richard Clark, who replaced former CEO Raymond Gilmartin in May.