Merck, citing 'ebb and flow' in priorities, plots 1,800 sales layoffs and new chronic care focus

A Merck spokesperson said the company is cutting loose 1,800 sales staffers and creating another 960 jobs.

In a nationwide shakeup, Merck & Co. plans to cut 1,800 U.S. staffers as it jettisons three of its sales teams and launches a new chronic care salesforce.

"These changes are part of ongoing companywide efforts to sharpen Merck’s focus on innovative R&D that addresses significant unmet medical needs and on our best opportunities for growth, while reducing overall costs," spokesperson Claire Gillespie told FiercePharma via email.

Merck plans to staff up to 960 on its new chronic care force. Employees who lose their jobs can apply for positions there, or apply for other posts elsewhere in the company. Gillespie cited the "ebb and flow" of Merck's business as the reason the company needs to undertake the cuts and build out the new team.

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Those who don't opt in for new positions will receive a "comprehensive separation package" that includes pay, benefits and more. The layoffs will take effect Jan. 2, and no jobs are moving outside of the U.S. 

Merck didn't specify which teams it's cutting. The new chronic care team will focus on diabetes blockbuster Januvia, plus other primary care drugs such as insomnia therapy Belsomra, according to Gillespie. It'll also sell Merck's respiratory and women's health offerings.

"We are also eager to launch, if approved, two diabetes medicines from our late-stage pipeline–ertufligozin and insulin glargine," she said.

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The decision comes as checkpoint inhibitor Keytruda ramps up in a big way for Merck, winning several new indications that bring with them megablockbuster sales expectations. On the other side of the coin, Merck recently had to write off a second hep C program—the first, back in February, cost it $2.9 billion—as that market contracts. Cholesterol drug anacetrapib hasn't lived up to its once-big expectations. The drugmaker abandoned that project just last week.

Recent patent losses have also taken a toll at the company, including Vytorin back in April and Zetia late last year.

With the moves, Merck joins the ranks of top pharma companies to undergo large-scale layoffs this year such as Eli Lilly, which in September announced 3,500 cuts, and beleaguered Teva, which is in the process of scaling down manufacturing and laying off 7,000 employees.

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Around the industry, many drugmakers have cited a shift to specialty meds and biologics as reasoning for sales force cuts. The drugs require fewer reps because they're prescribed by specialists rather than primary care doctors, and their sales have been booming.

Plus, biosimilars are just starting to make their foray in the U.S. market, with Merck launching its first—a version of Johnson & Johnson's Remicade—at a 35% discount to the brand back in July. That's an area that's potentially ripe for growth, but it will take a concentrated effort to steal share from entrenched brands.