Despite a recent downturn in Merck’s sales, cost-cutting has offset the effects of slowing revenues from Merck’s blockbuster drug Vioxx and recent growth in the generic market. Merck posted a five percent rise in profits and met the expected $0.81 a share.
Merck has reportedly cut back on television ads and focused on more targeted media like online Internet communities. Merck follows Pfizer’s announcement that it is reducing its sales force. Layoffs as well as expiring patents, an increase in the amount of drug recalls, and inflated sales predictions have all played a role in forcing Merck’s recent downsizing.
You reap what you sow. Big Pharma’s lack of focus on R&D and overemphasis on advertising and gaming the system to extend patent life is finally catching up with them.