Merck slashes data-management costs with China site

While it's not a needed blockbuster approval, Merck's ($MRK) clinical crew has claimed a modest victory on the off-shoring front with a reduction in data-management expenses. After pressing hard for additional outsourcing of clinical work in recent years, the U.S. drug giant saw data-management costs fall 25% to 30% after setting up a site in China to handle the workload, Outsourcing-Pharma reported.

The Whitehouse Station, NJ-based pharma group outsources about half of all clinical trial work, a huge increase from the 10% chucked over the wall prior to 2009, the website reported, quoting figures from Dr. Peter Aurup, Merck's vice president of global clinical operations, who spoke at an event in Philadelphia. The push to increase outsourcing came around the same time as the company's November 2009 megamerger with Schering-Plough and rounds of layoffs and other cost-control measures.

"Basically, we have two ways to execute clinical trials," said Aurup, as quoted by Outsourcing-Pharma: Use "in-house management of a foreign site and fully outsourced trials through CROs."

Shaving a few bucks here and there sounds like good business, and Merck managed to reduce its overall R&D budget from $8.46 billion in 2011 to $8.16 billion in 2012. Yet investors have harped on the lack of success from the company's expensive research mission, which gained a new leader this month with the news that ex-Amgen ($AMGN) R&D boss Roger Perlmutter is replacing Peter Kim.

The new leadership brings more change to Merck's evolving R&D shop, and now seems like a good time for its executives to highlight their wins and impress their new chief.

- check out the Outsourcing-Pharma article