Merck: ‘In-House API Production Remains Important Strategy’

By Dan Stanton

- Last updated on GMT

Related tags: Outsourcing, Manufacturing, Merck & co

Merck Strategises on API Production
Merck Strategises on API Production
Merck says it will keep in-house API production capacity as it continues to evaluate its manufacturing strategy.

Last week, Merck & Co - known as MSD in Europe - confirmed it was selling its production unit​ in Oss, The Netherlands to South Africa's Aspen Pharmacare in a deal that will see the US drug firm “become a customer of the Oss API operations.”​ 

Director of Communications at MSD, Hester de Voogd told the decision to sell the “unit comes as a hangover from when Merck merged with Schering-Plough.”

Merck acquired the manufacturing facility in 2009 after purchasing Schering-Plough for $41bn​ (€30bn) who in turn had acquired the facility two years earlier with its purchase of Organon​.

De Voogd added that it would be “business as normal”​ and that “jobs would be safe for all 950 personnel”​ at the API facility.


With this divestiture in mind we asked Merck whether it plans to sell off any other of its API plants and - like many of its industry peers - opt to work with third-party suppliers instead.

“While Merck and other pharmaceutical companies outsource API supply to contract manufacturers, strategic internal API manufacturing capability is an important part of the company’s integrated, interdependent global network.”

Among Merck’s integral units is its Riverside facility in Philadelphia. As part of a divestment strategy the site was sold in 2008​ to PRWT and Cherokee Pharmaceuticals who continued to supply Merck as a contract manufacturer.

To guarantee supply of a key API, Merck bought back the facilities​ and took over Cherokee two years later and, though the plant has seen cutbacks in contract fermentation, there are no plans to offload the unit or cease production.

Manufacturing Footprint

Merck also told the Oss sale is part of an “ongoing”​ evaluation of its manufacturing network that is designed to balance it growth objectives and its product portfolio.

The review has already seen the closure of eight production facilities​ in 2010.

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