Merck, Pfizer adopt different research strategies to cut costs

Pfizer CEO Ian Read announced slashing the drug maker’s research budget by a third to $6.5bn to $7bn over the next two years, bloomberg.com reported.

Meanwhile, Merck CEO Kenneth Frazier projected a spending of $8.1bn to $8.5bn in 2011, and withdrew the company’s long-term profit forecast to prop up research, according to the news agency.

Both the companies are eliminating thousands of jobs and closing plants to reduce costs after the acquisitions they completed in 2009.

While Merck is spending a higher proportion of its revenue on research than Pfizer, the latter plans to increasingly outsource business.