Schering-Plough announces $1 billion in cuts, cites damaging study

KENILWORTH, N.J. Schering-Plough announced more than $1 billion cut in spending costs, as well as plans to lay-off 10 percent of its workers and shut down manufacturing plants over the next two years.

The announcement came soon after the news that the American College of Cardiology in Chicago recommended that consumers halt use of the company’s cholesterol drugs Vytorin and Zetia. According to published reports, the two drugs had a combined sale of $5.1 billion last year, and were noted as one of the top selling cholesterol treatments in the world.

Things changed after the ACC published a study in the New England Journal of Medicine concluding that Vytorin did not have any medical advantage at reducing blockages that cause heart attacks over Zocor, a generic drug that is five times less expensive than Vytorin.

As a result, Schering-Plough lost 25 percent of its market value on Monday, and Merck, which co-markets Vytorin, lost 14 percent of its market value. Also, Health insurance agencies have now begun to recommend other drugs for cholesterol treatment.

According to published reports, an estimated 5,500 people will be part of a global layoff—including 8,000 employees in New Jersey and approximately 47,000 workers all over the world. The layoff and plant closing are expected to occur by 2010, while the remainder of the cuts will be completed by 2012.