Senator Targets Merck Over Outsourcing

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sherrod-brownFirst, Sherrod Brown goes after Pfizer over its outsourcing and the extent to which it purchases active pharmaceutical ingredients from such countries as China. Now, the Democrat from Ohio, wrote Merck to ask how the drugmaker guarantees the safety of pharmaceutical ingredients and its finished meds.

In explaining his reason, Brown cites a January 9 interview with Merck’s Richard Spoor, senior vp of global procurement, who said the drugmaker is “moving in the direction of externally sourcing approximately 35 percent of the overall manufacture of active pharmaceutical ingredients, intermediates, formulated pharmaceuticals, sterile products, vaccines, and packaging by 2010..This would represent a two-fold increase over what we currently source from external manufacturers.”

So Brown wants to know the mechanism Merck uses to track the chain of custody for each ingredient in its drugs and biologics; procedures used to ensure every facility in the chain operates in a manner consistent with its quality and safety standards; the percentage of its external sourcing that has been contracted out to US-based companies; the top ten countries to which it outsources by the percentage of business outsourced; and estimated average and median wages paid at companies producing active pharmaceutical ingredients for Merck, according to a letter sent Merck.

UPDATE: A Merck spokeswoman sends us this statement: “The company is reviewing the letter from Senator Brown that we received today and we will respond as he has requested. Merck does not purchase, nor do we use, materials from our suppliers who do not meet our rigorous standards.”

Previously, Brown asked Pfizer to clarify testimony earlier this year that 17 percent of its active ingredients and drugmaking is outsourced. Brown requested Pfizer report to the Senate HELP Committee how much Pfizer saves each year from outsourcing as well as on the frequency and nature of its outsourcing to countries with less stringent drug oversight standards.

Earlier this month, Brown received a response letter from Pfizer on its practice of outsourcing drug manufacturing and ingredient collection to countries with less stringent drug safety standards. Pfizer claimed that outsourcing does not compromise the safety of American consumers and that looser safety standards and lower costs do not motivate company decisions, according to the letter.

In an interview with Contract Pharma, Anthony J. Maddaluna, vp of Pfizer Global Manufacturing Strategy and Supply Network Transformation, says that “we’re outsourcing around 16 to 17 percent right now, and our current goal is around 30 percent in the next two to three years.”

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  1. As the guy who conducted that interview with Tony at Pfizer, I want to add that Pfizer’s plan is for almost 2/3rds of its outsourcing to come from supply agreements with facilities that it’s selling off. Tony remarked that, when they reach that 30% target, about 65% of total outsourced mfg. will come from divested facilities.

    Which is to say, they don’t plan on just sourcing materials willy-nilly, but want to use existing facilities that met their standards when they were part of the company’s internal network.

  2. Hi Gil,

    Absolutely correct. And sorry for not including that part of the commment from the Pfizer exec. I included the link in hopes others would want to read more, but I’m glad you pointed that out.

    Ed

  3. If Merck is so confident that their suppliers meet their “rigorous standards”, why don’t they make public a list of all their suppliers?

    They won’t do it, and neither will any of the other big pharmaceutical manufacturers.

    Merck’s “rigorous standards” will not meet the minimum expectations of the average consumer.

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