UPS (NYSE: UPS) and Merck (NYSE: MRK), known as MSD outside the United States and Canada, today announced that the companies have significantly broadened their existing distribution and logistics agreement to include aspects of Merck’s global supply chain around the world. UPS currently manages the distribution, warehousing and transportation of Merck’s medicines and vaccines in North America.
“This expanded agreement with UPS allows us to focus on our core business as a global healthcare leader that looks for innovative ways to bring our medicines and vaccines to patients in emerging markets and markets around the world,” said Willie A. Deese, executive vice president and president, Merck Manufacturing Division. “UPS has the proven logistics expertise to deliver Merck’s products with speed, consistency and care to our customers and patients.”
The UPS-Merck collaboration began in 2003 with package transportation and delivery services in the United States. The agreement expanded over time to include North American distribution, warehousing and multi-modal transportation services. UPS will now provide these services in certain markets in Asia and Latin America, including the emerging markets of China and Brazil. UPS also is providing transportation services in Europe.
“The UPS-Merck collaboration brings together the expertise of two companies that are globally strong, customer-focused and committed to driving positive change in the healthcare supply chain,” said Kurt Kuehn, UPS chief financial officer. “UPS is investing deeply to align the broad range of capabilities that we’ve developed to meet the very unique needs of this industry.”
Innovative solutions to better meet customer needs are already underway in China and Brazil where UPS is establishing a distribution center to support Merck’s manufacturing and packaging facilities as a way to help speed delivery of Merck products in those markets. In certain other markets such as the United States and Canada, UPS is managing warehousing operations for Merck products that require strict temperature and environmental controls, including vaccines and specialty pharmaceutical products.
Merck expects to realize long term cost efficiencies as a result of the expanded agreement with UPS. Financial details of the agreement were not disclosed. Meanwhile, Merck does maintain distribution agreements with other logistics and delivery providers.
This news release includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such statements may include, but are not limited to, statements about the benefits of the merger between Merck and Schering-Plough, including future financial and operating results, the combined company’s plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of Merck’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the possibility that the expected synergies from the merger of Merck and Schering-Plough will not be realized, or will not be realized within the expected time period; the impact of pharmaceutical industry regulation and health care legislation; the risk that the businesses will not be integrated successfully; disruption from the merger making it more difficult to maintain business and operational relationships; Merck’s ability to accurately predict future market conditions; dependence on the effectiveness of Merck’s patents and other protections for innovative products; the risk of new and changing regulation and health policies in the U.S. and internationally and the exposure to litigation and/or regulatory actions.
Merck undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in Merck’s 2010 Annual Report on Form 10-K and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov).