Merck has joined the troop of drugmakers expecting a big sales hit in Europe during the second half of this year. A $300 million hit, to be exact.
CFO Peter Kellogg said during an analyst call last week that he's expecting government price cuts to slash European revenues by $300 million, and Merck is scrambling to control expenses as a a result. The company is also working with European governments, trying to minimize the fallout.
"We have worked with many of the industry groups and governments to... address the short-term economic issues," Merck President Kenneth Frazier said during the call (as quoted by Bloomberg). "While we are taking steps to mitigate the immediate impact... we anticipate that the austerity measures will affect our revenue performance going forward."
Obviously, Merck isn't alone. The price cuts in Greece, Germany and Spain are affecting drugmakers of all stripes, with Big Pharma firms such as Johnson & Johnson announcing that they expect regional revenues to fall by hundreds of millions. And as Bloomberg points out, Pfizer's Q2 numbers haven't hit yet, and it sourced 29 percent of 2009 sales in Europe.
- read the Bloomberg story