---
title: "Merck's large factory closure and layoffs: Analysis: Attention drawn to the restructuring and layout of multinational pharmaceutical companies | Lianhe Zaobao"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/279824990.md"
description: "Merck Sharp & Dohme (MSD) has closed its factory in Tuas, Singapore, and laid off employees, raising concerns about the global restructuring of multinational pharmaceutical companies. Analysts believe that this adjustment is not only related to U.S. tariff policies but also under pressure from patent cliffs and competition from generic drugs. Economists point out that pharmaceutical companies are seeking new markets and business models to enhance resilience while coping with tariff and policy factors. The biopharmaceutical industry remains relatively stable during macroeconomic downturns but faces uncertainties and supply chain pressures"
datetime: "2026-03-19T16:32:17.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/279824990.md)
  - [en](https://longbridge.com/en/news/279824990.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/279824990.md)
generator: "portal-rs"
---

# Merck's large factory closure and layoffs: Analysis: Attention drawn to the restructuring and layout of multinational pharmaceutical companies | Lianhe Zaobao

Merck Sharp & Dohme (MSD) recently closed a factory in Tuas and conducted layoffs, raising market concerns about the global restructuring of multinational pharmaceutical companies and whether Singapore is facing a "divestment wave."

According to sources, Merck's closure of some production facilities in Singapore may be related to restructuring triggered by U.S. tariff policies. However, some interviewed economists believe that this adjustment is not solely driven by tariff factors.

Malayan Banking economist Joseph Tsai pointed out in an interview that he believes Merck's adjustment is not driven solely by tariffs; the company is undergoing a global restructuring phase, and its flagship drugs are facing industry pressures from "patent cliffs" and intensified competition from generic drugs.

According to industry insiders, since early last year, tariff and policy factors have become important considerations for pharmaceutical companies.

To avoid potential tariffs, several large pharmaceutical companies have announced plans to expand their research and manufacturing presence in the U.S. in recent years, with investment scales ranging from billions to hundreds of billions of dollars.

Some pharmaceutical companies are also seeking new markets and business models, including expanding into regional and other emerging markets, developing biotechnology services, and CRDMO outsourcing, to diversify risks and enhance resilience.

Biopharmaceuticals are generally considered a relatively stable industry even during macroeconomic downturns; however, uncertain tariff policies, rising geopolitical tensions, regulatory issues, and rapid technological advancements have increased industry uncertainty and supply chain pressures.

In September last year, the Trump administration sought to impose tariffs of up to 100% on brand-name or patented drugs produced overseas, offering exemptions in exchange for investment in the U.S., prompting pharmaceutical companies that had already anticipated this to accelerate their expansion and repatriation efforts in the U.S.

Industry insiders analyze that U.S. drug prices are primarily market-driven and have remained high for a long time. The Trump administration intended to use tariffs as leverage to pressure pharmaceutical companies to lower prices while promoting the return of manufacturing and research to domestic soil, which exacerbated the industry's vulnerability.

### Dependence on Exports Makes the Industry More Sensitive to Changes in Trade Policies

Sakshi Sikka, Deputy Director of the Pharmaceutical and Healthcare Sector at Fitch Solutions' research arm BMI, pointed out in an interview that the recent adverse factors facing Singapore's pharmaceutical industry mainly stem from its high dependence on export markets, making the industry very sensitive to external demand and changes in trade policies Especially in the markets of the United States and mainland China, the two countries together account for nearly 38% of Singapore's pharmaceutical exports.

At the same time, markets in the Asia-Pacific region such as Japan, South Korea, China, and India are strengthening local production and R&D capabilities through regulatory reforms, policy guidance, or capital investment, making regional competition increasingly fierce.

Joseph Tsai reminded that if the United States implements stricter tariff policies, Singapore may face more intense competition in attracting American pharmaceutical companies to expand their investments.

#### Further Reading

The government communicates with local pharmaceutical companies to respond to tariffs and discusses preferential arrangements for drug exports with the U.S. Trump plans to impose tariffs on imported drugs; analysis: may impact our pharmaceutical industry 

Xika believes that tariff risks disrupt industry supply chains and affect investment decisions, making it difficult for the Asia-Pacific market to remain unaffected. Any signals of escalating trade friction could impact the stability of regional supply chains and corporate confidence.

She added that the overall sentiment for pharmaceutical investment in 2025 is low, with pharmaceutical companies being cautious and reducing major investments; this cautious sentiment is unlikely to improve in the short term.

### Re-export accounts for over 40% of our drug trade, providing a buffer

However, Xika also pointed out that as a regional biopharmaceutical hub, our pharmaceutical industry has a re-export trade function, which may play a certain buffering role.

"More than 40% of the drugs exported through Singapore are redistributed and transshipped after import, rather than being completely produced locally, allowing Singapore to still diversify risks by flexibly adjusting routes when facing obstacles in specific trade routes." In the medium to long term, Singapore's strong fundamentals and multinational company network continue to keep the industry resilient. Other advantages include competitive corporate tax rates, a robust intellectual property protection system, and not being listed in the U.S. Trade Representative's "Special 301 Report," which is expected to continue attracting pharmaceutical investments in the long run.

Cai Xue Min also noted that the structure of investment sources may change, "As the proportion of investments from Chinese enterprises in Singapore increases, the local pharmaceutical industry may become more reliant on layouts from China or other markets in the future."

The pharmaceutical industry is an important pillar of Singapore's economy, with eight of the world's top ten pharmaceutical companies having production and R&D operations in our country.

Earlier this month, Singapore's Minister of State for Foreign Affairs and Trade and Industry, Yan Xiao Fang, stated in response to related questions in Parliament that the current 10% tariff implemented under Section 122 of the Trade Act of 1974 is roughly the same as the 10% tariff imposed on goods exported from Singapore to the U.S. since April last year, and it is expected that these tariff measures will not have a significant direct impact on our economy.

Pharmaceuticals and pharmaceutical raw materials are not subject to taxation under Section 122.

She also emphasized that our country will continue to attract global companies to invest in new pharmaceutical and R&D projects in Singapore, creating quality job opportunities for Singaporeans.

On the other hand, regarding Merck's closure of some production facilities in Singapore and layoffs, a spokesperson for the Singapore Economic Development Board responded to inquiries from Lianhe Zaobao on Thursday (March 19) that they are currently working closely with Merck, the Workforce Development Agency, and the National Trades Union Congress Employment and Skills Training Centre to provide support for affected employees and will assist in arranging job placements

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> **Disclaimer: This article is for reference only and does not constitute any investment advice.**