Big Pharma's Manufacturing Blueprint for the Future - Pharmaceutical Technology

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Big Pharma's Manufacturing Blueprint for the Future
The pharmaceutical majors continue rationalizing manufacturing capacity in established markets as they forge their manufacturing networks in biologics and emerging markets.

Pharmaceutical Technology
Volume 35, Issue 8, pp. 40-47

Merck. Following its $49.6-billion acquisition of Schering-Plough in late 2009, Merck & Co. began a global restructuring program in February 2010, in which Merck announced plans to reduce its total workforce, measured at the time of the merger, by approximately 17% as well as to eliminate vacant positions at the time of the merger. The reduction comes from eliminating duplicative positions in sales, administrative, and headquarter organizations as well as from the sale or closure of certain manufacturing and R&D sites.

As part of that restructuring, Merck announced plans to phase out operations at certain research and manufacturing sites as well as to continue to consolidate office facilities worldwide, as outlined in the company's 2010 SEC annual filing. The eight research sites affected include those in: Montreal; Boxmeer (Nobilon facility only), Oss, and Schaijk, Netherlands; Odense, Denmark; Waltrop, Germany; Newhouse, United Kingdom; and Cambridge (Kendall Square), Massachusetts.

In the second half of 2010, Merck began phasing out operations at eight manufacturing facilities, and these sites will exit the global network as activities are transferred to other locations. Merck reported plans to cease manufacturing activities at its facilities in Comazzo, Italy; Cacem, Portugal; Azcapotzalco, and Coyoacan, Mexico; and Santo Amaro, Brazil, and the company intends to sell the Mirador, Argentina and Miami Lakes, Florida, facilities. In Singapore, chemical manufacturing will be phased out at the legacy Merck site, but it will continue at the legacy Schering-Plough site. The company's pharmaceutical manufacturing operations will continue at both Singapore facilities. In addition, manufacturing operations at the Kenilworth, New Jersey, site will be discontinued, and these activities will be consolidated with existing operations at other Merck facilities. Also, earlier this year, Merck sold its contract biologics manufacturing activities to Fujifilm, including its equity interests in two Merck subsidiaries, Diosynth RTP and MSD Biologics UK. These entities had facilities in Research Triangle Park, North Carolina, and Billingham, United Kingdom.

In emerging markets, in July 2011, Merck signed a framework agreement with China's Simcere Pharmaceutical Group to form a joint venture in China with the goal of building a strategic partnership in development, registration, manufacturing, and sales. The initial focus of the partnership will be branded pharmaceutical products for cardiovascular and metabolic diseases. Simcere has seven GMP-approved manufacturing facilities in the Chinese provinces of Jiangsu, Hainan, Shandong, Jilin, and Anhui, according to company information. In April 2011, Merck formed a joint venture with India's Sun Pharmaceutical to develop, manufacture, and commercialize new combinations and formulations of branded generic drugs in emerging markets. Sun has 20 plants (for producing drug substances and finished products) in India, Israel, the US, Canada, Hungary, Brazil, Mexico, and Bangladesh.


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