Outsourcing is one of the 4 cornerstones of the 08 Crash.  2) the others being the loose money policy of the Federal Reserve Bank which created the housing bubble by its loan policy to member banks and similar debt bubbles with credit cards, federal government, and commercial loans.  3) the deregulation of the financial industry. 4) falling wages when measured by the real CPI whici currently has risen 12%--not the bullshit feds listed 3%.    

Pharma's new favorite outsourcing spot: China

10/3/08 Tracy Staton, FiercePharma

http://www.fiercepharma.com/story/pharmas-new-favorite-outsourcing-spot-china/2008-10-03?utm_medium=nl&utm_source=internal&cmp-id=EMC-NL-FP&dest=FP

Quality-control fears notwithstanding, China has knocked India off the catbird seat as pharma's favorite spot for outsourcing. According to a new report from PriceWaterhouse Coopers, China beats every other Asian country as an investment and contracting destination, followed by India, Korea and Taiwan. The countries all were evaluated by cost, risk, and market opportunities.

And it's not just low-cost production that's luring pharma to Asia, either. The report found that the region is growing in stature as a source for innovation and discovery.[i]   Plus, local markets are burgeoning, giving pharma the potential for lots of new emerging-market sales.

The various countries have different strengths, with China and India the primary drivers of pharma growth in the region. Singapore, on the other hand, is considered more of an R&D specialist, while Korea and Taiwan are emerging as competitors for pharma investment and business. What's contributing the the region's magnetism? Greater attention to intellectual property protections, for one. Cheaper clinical trials, of course. And an explosion of growth in certified contract manufacturers. In India, for example, there are more than 100 FDA-approved pharma plants, the largest number in any country outside the U.S.

More bull shit:  it isn’t falling profit (for their revenues were down only 2%), but rather outsourcing that caused Merck to terminate 12% of their work force.  The entire industry is moving as much as possible to China and India as quickly as possible

They (the globalizers) promised us the good jobs, and the shitty manufacturing ones would be outsourced.  But now it is the good ones, from accounting to the pharmaceutical and computer industries that are taking flight.  Today there was more bull shit reporting.  Merck claims that earnings dropped for the 3^rd quarter 28% and was the cause of their cutting their workforce an additional 12% (7,200 jobs).  But a reading of the release indicates that though sales fell for some key drugs, however, overall sales fell only 2%.  This is actually a growth given that there is a more than 2% drop in the overall market due to our current economic depression.  Earnings didn’t fall 28%, rather Merck unloaded some debt that they had carried on their books from restructuring.  By doing this their earnings went up, for their taxes went down. 

It seems odd that a company can get rid of so many U.S. employees and still maintains the same revenue.  Could it be that they are outsourcing clinical trials and manufacturing? 

Merck to cut 7,200 jobs + prior cut of 10,400

October 22, 2008 — 9:33am ET , Christe Bruderlin-Nelson

Merck said today that it will cuts 7,200 jobs--more than 12 percent of its workforce--following the announcement of a 28 percent drop in Q3 earnings. The job cuts, which will include 6,800 active employees and 400 vacancies, will be made in all areas of the company. Forty percent of the cuts will be in the U.S. and 25 percent will be senior and mid-level execs. Back in 2005, Merck cut 10,400 positions; these new cuts come in addition to that, and are expected to be completed by 2011.

In Q3, the company took a multimillion restructuring million charge (about 29 cents a share) and had unimpressive sales. As a result, net income dropped to $1.08 billion--just 51 cents a share--down from $1.53 billion and 70 cents a share a year ago. Third-quarter revenue was down 2 percent, partly due to sluggish sales for most of its vaccines, major generic competition for Fosamax, and a drop in its cholesterol drug sales of about 15 percent to $1.1 billion. Merck did see some positive movement with its blood pressure, asthma, HIV and diabetes drugs.

The restructuring includes more than just layoffs. In a release, the company said it would:

• accelerate the roll-out of a new, more customer-centric selling model;
• make greater use of outside technology resources, centralize common sales and marketing activities, as well as consolidate and streamline its operations; and
• focus its manufacturing division on core products and outsource non-core manufacturing.

In addition, Merck said it will consolidate its R&D ops. Basic search operations will be organized to consolidate work in support of a given therapeutic area into one of four locations. As a result, Merck will close three research sites in Japan, Italy and Seattle by the end of 2009. 

"Our focus remains on increasing revenue from our new and in-line products, fully funding innovative R&D, investing in growth opportunities, such as emerging markets, and becoming the most trusted partner in delivering value to our customers. With the right long-term strategy and our efforts to reshape Merck's business, including today's actions, I am confident we are building a solid foundation for achieving industry-leading performance in the future," said CEO Richard Clark (photo). Merck expects restructuring costs from $1.6 billion to $2 billion through 2001, but hopes to save between $3.8 billion and $4.2 billion by 2013.

Chart of Drug sales at:

http://www.fiercebiotech.com/pages/mercks-q3-2008-drug-sales-results

Merck Reports Third-Quarter 2008 Financial Results

October 22, 2008

 http://www.fiercebiotech.com/press-releases/merck-reports-third-quarter-2008-financial-results?utm_medium=nl&utm_source=internal&cmp-id=EMC-NL-FP&dest=FB

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