SHANGHAI - Merck announced it would invest $162 million to expand its capacity in China by building a new manufacturing facility, shortly after the company detailed its plans to integrate its R&D, manufacturing and business operations worldwide.

The new facility is expected to be operational in the first quarter of 2012 with annual packaging capacity of 300 million units. The facility will package Merck's solid dosage pharmaceuticals and sterile products, manufacture clinical and commercial supplies to support new product launches in the future and third party logistics support for the China market.

"For MSD to continue on our growth path, we need to be leaders in business-critical markets, such as emerging markets like China," Merck's China arm, Merck Sharp & Dohme China, told PharmAsia News.

"MSD's success in China will be determined by our long-term commitment and investment in this market, expanding MSD's presence across multiple sectors, delivering on meeting unmet medical needs, and responding with flexibility and speed to customer demands," a spokesman said.

The new facility will be located at Hangzhou, capital city of Zhejiang province south of Shanghai. In 1996, Merck formed a joint venture with Hangzhou Pharmaceutical Group to establish its first manufacturing site in China-MSD Hangzhou. When completed, the new manufacturing site will be one of the largest of such facilities throughout the Asia Pacific region, MSD said.

According to a July 8 announcement, Merck will cut eight research centers and eight manufacturing sites as part of its integration with Schering Plough. The move is expected to save $2.7-$3.1 billion by 2012 (Also see "Merck Cuts 8 Research, 8 Manufacturing Sites As Part Of Schering Integration" - Pink Sheet, 8 July, 2010.).

And while the company is making cuts in some areas, Merck will continue to make new strategic investments, particularly in emerging markets, the company said.

"China has always been one of the most important strategic markets to MSD," MSD China said.

Merck's cholesterol drug Zocor (simvastatin) became the first drug from a multinational company to see a major price cut on China's essential drug list. The price was slashed 50 percent in order to be listed on the EDL at the beginning of year.

"In this way, we hope it can become more accessible to more Chinese patients and provide additional benefit to Chinese people. It's also a strong reflection of MSD's commitment to support Chinese healthcare reform," the company said.

In April, the company launched its DPP-4 inhibitor Januvia (sitagliptin) to join the race in what has since become the largest diabetes market in the world (Also see "Merck Sharp & Dohme Launches Januvia In China To Join Race In Second-largest Diabetes Market" - Scrip, 1 April, 2010.).

-Dai Jialing (j.dai@elsevier.com)

Merck Expands Manufacturing Site In China As Part Of Its Global Restructuring Program

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