The Boston Globe reported that “pharmaceutical giant Merck & Co., will shut a five-year-old Cambridge research lab as part of a global cutback that will reduce the company’s worldwide payroll by 16,000 jobs, about 15 percent,” and save $3.5 billion annually by 2012. The lab, which opened in Cambridge at the beginning of 2006, doubled in size about six months later.
Prior to this announcement, “the company already had eliminated about 11,000 jobs.” Closing the lab in Cambridge will cover additional research and manufacturing jobs.
Interestingly, although “Merck would not specify how many jobs will be eliminated at its Kendall Square operation, which was developing cancer drugs,” this move runs “counter to other drug makers’ moves to expand operations in the Boston area.”
According to the Globe, “the lab had about 100 employees early last year, when it was run by its former owner, drug maker Schering-Plough Corp.” Consequently, after the lab is closed, “an unspecified number of workers will move to another Merck lab in Boston’s Longwood Medical Area, which also does cancer-drug research, a Merck spokesman said.”
The company’s press release indicated that the “Cambridge Massachusetts site is the only US research center scheduled to be closed as part of Merck’s global consolidation.” Other sites being closed “will include the shuttering of seven research-and-development sites across Europe and in Canada over the next two years.”
When Merck made this decision to move operations outside of Massachusetts one potential factor was the anti industry environment in Massachusetts, highlighted in the Code of Conduct, which have made it harder for companies to attract talent from local universities, and to work with members of academia due to stringent administrative and compliance requirements.
When companies make these decisions (the research facility is five years old), they are not living in a vacuum. Merck is not discontinuing research in cancer only consolidating their research activities. Had the Massachusetts not made the environment anti industry perhaps those jobs would not have been lost.
Fortunately, the state legislature is considering changes to their restrictions which if repealed will take that factor out of life science manufactures decision making process.