Schering-Plough Sets Cost-Cutting Program

Schering-Plough has launched what it calls a "productivity transformation program" to generate $1.5 billion in annual savings and synergies. The company says the program is a response to intensifying pressure on the drug industry and to confusion in the U.S. market around the cholesterol drugs Zetia and Vytorin (see page 11). The savings represent about 10% of the firm's estimated 2007 cost base. The program will include cutting of middle management functions, a "resizing" of the firm's R&D cost base, and the reduction of the number of plants the company operates around the world.