Merck Reduces Developed-Market Sales Force by a Third

Merck & Co. Chief Executive Officer Kenneth Frazier said the company reduced its sales force in developed markets by 32 percent in 2010, while building up the staff in China, Brazil and Russia.

The combined global sales force decreased 12 percent from 2009, Frazier told investors at the J.P. Morgan Healthcare Conference in San Francisco. Emerging market drug sales will be responsible for more than 25 percent of the company’s pharmaceutical and vaccine revenue in 2013, from about 18 percent now, he said.

Merck, based in Whitehouse Station, New Jersey, bought Schering-Plough Corp. for $49 billion in November 2009 to add products and expand in emerging markets. Merck has said it’s on schedule to cut 15,000 jobs from the combined workforce and close facilities to save $3.5 billion in annual costs by 2012.

“Our goal is to be as strong in emerging markets as we are globally,” Frazier said at the conference. “We’re No. 2 globally, but No. 5 in the emerging markets.

“In China, the leader of the market has about 3 percent of the market share, so the winners haven’t been determined,” Frazier said.

Merck has said it’s reducing the number of salespeople who visit physicians’ offices. The company is facing generic competition by 2013 for medicines with more than $8 billion in annual sales. Last year, the drugmaker lost exclusivity for blood-pressure pills Cozaar and Hyzaar with combined 2009 sales of $3.6 billion.

To contact the reporter on this story: Tom Randall in New York at trandall6@bloomberg.net.

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net.

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