Processing Magazine

Merck Rebuying Former Drug Ingredient Factory

August 11, 2010

Merck & Co. has agreed to buy back a central Pennsylvania factory from the contract manufacturer that bought it 2-1/2 years ago, according to the Associated Press. Merck and the owner of the Cherokee Pharmaceuticals plant, outsourcing firm PRWT Services Inc., said they "mutually agreed" to the sale. Drug companies have been slashing costs wherever they can, amid stagnant or declining revenue. They''re being squeezed as blockbuster drugs get generic competition, research programs fail to produce enough lucrative new drugs and government health programs in Western countries demand lower prices due to weak economies. The factory in Riverside, Pennsylvania, makes active ingredients for prescription medicines, along with agricultural chemicals and other products. Merck agreed to the repurchase because the factory supplies a key active ingredient for one of its drugs.