Merck’s sales model redesign
Merck said yesterday it expects to realize another $1 billion in savings by 2010, driven largely by changes in its commercial model.
The savings from marketing moves, added to cost savings the firm announced in November, will bring total expected savings to $4.5 to $5 billion through 2010, Merck said.
The changes will include concentrating more on key opinion leaders (KOLs) and payers and less on physicians, increasing use of technology such as e-detailing and efforts to target its communications.
CEO Richard Clark noted that Merck already has cut in half the number of reps promoting the same products and reduced the number of products sales people carry to just two.
Pilot programs have helped field personnel increase productivity and interaction time with doctors, he added.
"We will be driving productivity by redeploying our sales representatives and by using new tools to help them do their jobs more effectively," he said.
Clark, who spent seven years with the pharmacy benefit manager Medco, said he sees "how important it is to respond to the needs of payers."
The company's engagement with KOLs and payers will focus on nine disease areas, including Alzheimer's disease, artherosclerosis, cardiovascular disease, diabetes, obesity and sleep disorders.
Merck has compounds in some of these areas in its pipeline, including Januvia, code named MK-431, for controlling blood sugar in diabetics; Gaboxadol for insomnia; and two compounds, MK-524A and MK-524B, for lipid/cholesterol management.
The firm plans to launch four vaccines in the next several months.
Merck also reiterated its policy to continue fighting the Vioxx litigation, adding that it will resist efforts to consolidate trials in state court.