Senator Brown Requests Information about Merck's Outsourcing Procedures

Washington, DC (July 24)-Senator Sherrod Brown (D-OH) sent a letter to Richard T. Clark, president and chief executive officer of Merck (Whitehouse Station, NJ), to ask for information about the company’s reliance on global outsourcing for the manufacture of pharmaceutical ingredients and finished products. Brown asked Clark to explain how Merck guarantees the safety of pharmaceutical ingredients and final products.

“This is about corporate responsibility and consumer safety,” said Brown in a press release. “Drug-company profits cannot come at the expense of consumer safety. Pharmaceutical companies must be able to guarantee the safety of their products and trace the origin of their ingredients.”

In an interview conducted on Jan. 9, 2008, Richard Spoor, Merck’s senior vice-president of global procurement, said the company plans to outsource approximately 35% of the overall manufacture of active pharmaceutical ingredients (APIs), intermediates, formulated pharmaceuticals, sterile products, vaccines, and packaging by 2010. Spoor added that the change would roughly double Merck’s amount of outsourced manufacturing.

Prompted by Spoor’s remarks, Brown requested that Merck describe the following:

• The specific mechanism the company uses to track the chain of custody for each ingredient in its drugs and biologics

• The procedures used to ensure that every facility in the chain operates in a manner consistent with Merck’s quality and safety standards

• The percentage of the company’s external sourcing that has been contracted out to US-based companies

• The top 10 countries to which Merck outsources by the percentage of business outsourced

• The estimated average and median wages paid at companies producing APIs for Merck in each country, compared with the average and median wages that Merck would pay if it manufactured these functions internally

• The effect of the company’s outsourcing activities on the price of the medicines it sells in the US.

In addition, Brown asked Clark to name the three top reasons that Merck outsources to China, India, and other developing nations. Brown asked Clark to confirm that every pharmaceutical component and finished product Merck procures is manufactured in a facility that has been approved by the US Food and Drug Administration. He also asked for confirmation that no company that Merck hires procures ingredients from a third party with facilities that are not FDA-approved.

Brown’s letter to Merck follows his call on FDA to evaluate how it safeguards the American public from drug products containing contaminated, outsourced ingredients.

Brown also wrote to Pfizer (New York) asking for further clarification of testimony that 17% of that company’s APIs and drug-product manufacturing is outsourced. In a response sent earlier this month, Pfizer claimed that outsourcing does not compromise American consumers’ safety and that loose safety standards and low costs do not motivate company decisions.