Cost Cutting Outlined By Merck

A cost-cutting program has been outlined for Merck & Co by its chairman Raymond Gilmartin at a meeting of analysts in New York. Manufacturing costs are to be reduced by between $200 million and $250 million by the end of 1996. Selling and administrative expenses will be cut by around $100 million, he said.

One of the key tasks of the group is to make sure that its acquisition Medco Containment Services earns its keep. Mr Gilmartin also said that Merck has to ensure revenue growth through a series of new product launches. In order to make up for some of the dilution of Merck's earnings per share resulting from the Medco acquisition, the company is planning to repurchase around $2 billion of its shares.