...MERCK AND RIVER BLINDNESS 1. Think about the definition of stakeholders — any parties with a stake in the organization’s actions or performance. Who are the stakeholders in this situation? How many can you list? On what basis would you rank them in importance? People suffering from the disease or those who potentially may be infected – would directly benefit from the cure Merck employees at all levels – profitability and the economic health of the company affects current employees Merck shareholders – inability to profit from the drug might have a negative effect on shareholder’s value, but taking the stand on “doing the right thing” might have a favorable effect on company’s reputation and increase the value of the stock Various healthcare organizations – Merck is one of the leaders in the industry whose actions or inactions may affect the state of the industry as a whole One way to rank stakeholders in importance is by their level of benefit from the drug putting people suffering from the disease in the first place as they would benefit the most from the invent of the cure. Then, employees and shareholders would share the second place, provided that the company would most likely not be able to recover funds invested in the long and expensive process of developing the drug which in turn would affect company’s profitability. Finally, various healthcare organizations would rank third; the effect on them would depend on the level of their involvement in the process...
Words: 2838 - Pages: 12
...Caso Merck & Co: Evaluación de una oportunidad de licencias de medicamentos El caso está ambientada en el año 2000. Merck & Co. es una compañía global, impulsada por la investigación farmacéutica, investiga, desarrolla, fabrica y comercializa una amplia gama de productos para personas, así como productos de salud animal. Opera directamente a través de empresas conjuntas establecidas y prestas servicios de gestión de productos farmacéuticos (PBM). Durante los últimos 5 años, la compañía ha lanzado 15 nuevos productos de éxito, las drogas más populares han generado la cantidad de $5.7 mil millones en ventas en todo el mundo. Entre 1998 y 1999, un aumento del 20% en las ventas se observó. Merck posee las patentes de los medicamentos más populares, sin embargo, expirará en 2002. Una vez que las patentes han caducado, las ventas disminuirán por los medicamentos genéricos sustitutos y baratos en el mercado. La compañía tiene como objetivo mantener un buen camino en el desarrollo de fármacos, por constante renovación de su cartera, lo que impide la pérdida de ventas de medicamentos que van fuera del tiempo de la patente. Los nuevos fármacos son bien desarrollados por la investigación interna (la mayoría) mediante la colaboración con empresas de biotecnología. El producto: Davanrik Davarnik fue desarrollado por los productos farmacéuticos LAB, un producto farmacéutico pequeño y relativamente joven especializada con compuestos para el tratamiento de trastornos neurológicos. Originalmente...
Words: 358 - Pages: 2
...Executive Summary Merck & Co., Inc. is one of the largest pharmaceutical firms in the world. The company is known for its discovery, development, production, and marketing of products and services that are geared towards the maintenance and restoration of health. The company’s business focuses on two areas: human and animal health products and Services and Specialty Chemical products. Medco Containment Services, Inc. is one of the largest pharmacy benefits manager (PBM). The company was mainly responsible for the management of drug benefits for more than 65 million Americans whose prescriptions were filled at retail drug stores or the company’s mail order business. Merck’s acquisition of Medco was one of the largest health care industry mergers, as well as one the largest U.S. corporate unions in the early 1990’s (Olmos, 1993). In addition the merger provided Merck with access to Medco’s technology and information. With the merger they acquired more than 1,000 pharmacists who decided or advised physicians on how prescriptions should be filled (Tanouye, 1993). This merger allowed Merck to increase its pharmaceutical sales through the use of patient information from Medco’s database. The merger was expected to solidify Merck’s presence in the pharmaceutical industry by giving it direct access to the healthcare providers that had influence over the type and price of prescription drugs (Olmos, 1993). Merck acquired all of the outstanding shares of Merck for approximately...
Words: 4515 - Pages: 19
...would be a valuable asset. The insight it can give Merck and the access to the market to increase share and give insight to Merck’s drug treatments will be invaluable. MARKETING & SALES CONSIDERATIONS Currently Merck has to send out its own reps to doctors where Medco does the same to doctors and companies. This will eliminate that area for Merck and result in a $1 billion annual savings in redundant marketing costs by a reduction of Merck’s sales force by using the marketing strategies of Medco’s database and ideology of marketing to plan managers as opposed to doctors. OPERATERATIONAL CONSIDERATIONS Medco’s database that allows Merck to identify prescriptions that can be switched from competitors to their brand will help increase market share while weakening competition. Merck pharmacists will be able to suggest these switches to the patient’s doctor. FINANCIAL CONSIDERATIONS Medco has about 33 million customers in the United States and manages 95 million prescriptions a year for government, unions, insurance firms and companies. Revenues for Medco were $2.2 billion. OTHER FACTORS (REGULATORY ISSUES – HUMAN RESOURCES ISSUES – SYNERGY ISSUES) Synergy between Merck and Medco could be achieved by IT integration, non-duplication of efforts and using Medco’s approach of working with plan managers instead of doctors to reduce costs of marketing. Company Backgrounds Merck & Co., Inc. (NYSE: MRK), dba Merck Sharp & Dohme, MSD outside the...
Words: 1795 - Pages: 8
...Merck: Business Analysis Tamikiia Brown MGT521 July 11, 2011 Sharon Palmitier Merck: Business Analysis Merck is a flourishing research-driven pharmaceutical company, which discovers, develops, manufacturers, and promotes an extensive variety of human and animal health products. Although Merck is one of the biggest pharmaceutical companies of the world, they still come across problems today while striving to sustain a lead against its competition. Merck has achieved success with its lengthy history of breakthrough drugs and the development of three significant pharmaceutical products: antibiotics, vitamins, and hormones. Merck’s success relies heavily on its management and how they modify the business model in place to that of the ever-changing economy. Influence of Economic Trends The global pharmaceutical market is likely to undergo a wide variety of changes with new competition arising in India, China, Malaysia, South Korea, and Indonesia. This new competition has a growing economy and has made a difference between the product cost and disposable income of consumers. According to NASDAQ (2011),“ Global pharmaceutical market sales are expected to grow at a 4-7% through the year 2013 largely being driven by the growing access to health care in emerging economic regions” (para. 2-5). Short-term growth within this area is stimulated by the United States market, as it continues to be the largest pharmaceutical market in the world. A focal point on research and...
Words: 1954 - Pages: 8
...Merck’s Business Environment MNGT/521 University of Phoenix November 7, 2011 Kevin Wilhelmsen Merck’s Business Environment There are many factors a business, such as Merck, must have in order to be successful, for example strong financial statements, leading technology, and globalization. With the help of income statements, balance sheets, and cash flow statements, a financial analysis can be applied in a wide variety of situations to give business managers the information they need to make critical decisions (Financial Analysis, 2010). They also provide information in regards to the financial health of a company. Pharmaceutical companies are using technology to conduct clinical trials, which has proven to be beneficial to research, development, and the introduction of new products. Globalization is also important for Merck when it comes to product distribution. Outsourcing was been adopted by Merck in order to produce equal quality vaccines and medications at a cheaper cost. Review of Finances Analyzing a company’s income statement, balance sheet, and cash flow is a prime way in determining their success. A comparison can be made between the competition in the industry and a leader can be established. An analysis can also show which company is spending more on research and development and in turn, producing better products. After review of the income statements, Merck’s worldwide sales were $12 billion...
Words: 2950 - Pages: 12
...9-201-023 R E V: M A R C H 25, 2003 RI CH A R D S. R U B A CK Merck & Company: Evaluating a Drug Licensing Opportunity Rich Kender, Vice President of Financial Evaluation & Analysis at Merck, was working with his team to decide whether his company should license Davanrik, a new drug with the potential to treat both depression and obesity. The small pharmaceutical concern that developed the drug, LAB Pharmaceuticals, lacked the resources to complete the lengthy approval process, manufacture the compound, and market the drug. LAB had approached Merck with an offer to license the compound. Under this agreement, Merck would be responsible for the approval of Davanrik, its manufacture, and its marketing. The company would pay LAB an initial fee, a royalty on all sales, and make additional payments as Davanrik completed each stage of the approval process. Merck In 2000, Merck & Co., Inc. was a global research-driven pharmaceutical company that discovers, develops, manufactures and markets a broad range of human and animal health products, directly and through its joint ventures, and provides pharmaceutical benefit management services (PBM) through Merck-Medco Managed Care. Since 1995, Merck had launched 15 new products including Vioxx™ for the treatment of osteoarthritis, Fosamax™ for the treatment of osteoporosis and Singulair™ for treating asthma. The Company earned $5.9 billion on 1999 sales1 of $32.7 billion, about a 20% increase from 1998. Exhibits 1 and 2 contain Merck’s...
Words: 2375 - Pages: 10
...Case Study: Merck and the Vioxx Recall Kelvin Gabel Benedictine University Case Study: Merck and the Vioxx Recall According to Lawrence and Weber (2014), former Merck CEO George W. Merck implied a corporate vision of social responsibility for Merck & Co., Inc. (Merck) when he stated in 1950 that medicine was for the people and that loyalty to that concept would lead to greater profits. On the surface, it appears Merck has historically lived its declared mission of putting people first. This is demonstrated by the company forfeiting patent and profits from the antibiotic streptomycin and the drug Mectizan (Lawrence, 2014). Merck was well rewarded for its people first philosophy. Though it was ranked fifth in asset and market value, it ranked first in profits. Additionally the company had a stellar reputation of being perceived as the most ethical and socially responsible of the major drug companies (Lawrence, 2014). Today Merck Pharmaceutical’s mission statement is “to discover, develop and provide innovative products and services that save and improve lives around the world (Merck, 2015).” Reading Merck’s current mission statement lacks both the compassion of placing people first and the implied social responsibility of Mr. Merck’s statement in 1950. To be contextually correct historically in forming a view of Merck and the Vioxx recall issue, I sought to find a corporate mission statement from the period of the recall which was in 2006. According to Culp...
Words: 1294 - Pages: 6
...Problem Solution: InterClean, Inc. InterClean, Inc., a leader in the industrial cleaning and sanitation industry. They are planning to launch a marketing blitz announcing the launch of their new solutions focus. The sales force excels at demonstrating and selling products, however, CEO David Spencer envisions high performance teams that not only sell its high quality products, but also educate and train clients in the customer’s organizations. In preparation for the launch, leadership must evaluate the skills and talents within the organization and determine the needs to realize the new strategy. Extensive research, training and development will need to occur quickly in order meet the targeted 90-180 day goal of launching the marketing blitz. Situation Analysis Issue and Opportunity Identification The current organizational structure does not support the new strategy. The current sales staff lacks the skill set to excel in the future company focus. “High-performing firms display a greater commitment to training and skill development than their lower-performing counterparts. This practice, a core HRM activity, is related to other ideas about the need for continuous improvement and development over time. Thus, firms must take care to select people with the ability and willingness to learn and develop, and they must establish reward practices that encourage employees to participate in training activities.” (Dreher & Dougherty, 2001, ch.1, p.13-14). Organizational behavior...
Words: 3295 - Pages: 14
...CASE 6-MERCK Problems The first problem is even before the drug was approved, some evidence cast doubt on the safety of Vioxx. The study found—as the company had expected—that Vioxx was easier on the stomach than naproxen. But it also found that the Vioxx group had nearly five times as many heart attacks. Some analysts criticized DTC advertising, saying that it put pressure on doctors to prescribe drugs that might not be best for the patient. Solutions Merck faced serious and terrible situation because its medicine caused patients’ deaths. According to the case, The Merck Inc.’s solution is that recalled all the Vioxx which cause the stock price decrease dramatically. But it is important to repair the company’s image and leave good impression to people. By apologizing to consumers through TV and taking responsible for the mistakes will help Merck Inc. retrieve their consumers. On the other hand, analyst argued that the methods DTC advertise their products are criticized. The reason is that analysts think that “when a patient comes in and wants something, there is a desire to serve them.” Because of the direct-to-consumer ad makes patients believe that all drugs are safe, it is not correct to leave such impression to consumers. Drugs are not safe at all, and doctor should examine all of them before recommending to patients. Recommendations I think the solution is a good symbol to help company’s development. As we all know, if they only cared about profit, not their patient’s...
Words: 454 - Pages: 2
...Merck 1. What products has Merck developed and introduced recently? On the Merck website they have developed a product pipeline. This is a very helpful tool for those who want to follow their progress. This pipeline allows for people to see what phase each developing medication is in. These phases include phase II, phase III, and under review. The pipeline also shows the medication category, therapeutic area, and whether or not the medication has advanced. According to the product pipeline medications that Merck have developed that are recently under review are Zerbaxa, Omarigliptin, Grazoprevir/Elbasvir, Bridion, and Keytruda. Two of these medications have been introduced and moved forward including Grazoprevir and Keytruda. Medications included on the phase III list include Verubecestat, Anacetrapib, Keytruda, Letermovir, Ertugliflozin, Omarigliptin, Zerbaxa, and Doravirine. Medications included on the product pipeline list for phase II include Relbactam, Keytruda, Vericiguat, and Grazoprevir. 2. What role does research play in Merck's success? How...
Words: 471 - Pages: 2
...| Merck-Medco | Analysis of an Acquisition | | | | | Merck-Medco Acquisition Analysis Executive Summary: Recommendation It is recommended that Merck tender a cash bid of $6.6 Billion dollars to acquire Medco Containment Services Inc. Marketing & Sales Considerations Medco currently maintains relationships with employers, plan sponsors, and managed care organizations and services over 33 Million individuals. The information collected on physician prescription practices, and patient records and refill tendencies will allow Merck to target their sales and marketing efforts to more effectively reach target markets. In addition, the data collected will be used to identify competitor drug deficiencies and pricing. Operational Considerations A combined Merck/Medco company would result in the control of the entire drug manufacturing and selling process. Merck would have the ability to manufacture drugs specific to each patients needs with collected information being used to research and develop new drugs for sale. Due to the vertical nature of this acquisition Merck will continue to be run independently of Medco so that each division can focus on executing on their strengths within the industry. Overlapping operations, such as marketing and sales, will be consolidated at an estimated after acquisition savings of $1 Billion. Financial Considerations As mentioned, it is recommended that the tendered bid be comprised of all cash. While this will...
Words: 2193 - Pages: 9
...affected in the Merck Vioxx case would include investors or shareholders, employees, customers, suppliers, and distributors. Investors and employees would be considered the internal stakeholders while customers, suppliers, and distributors would be considered external stakeholders. The investors or shareholders are very important to Merck's success because they supply the funds for research and development through their investment in the company's stock. Without them, there really is no company. If the firm struggles, the investors are likely to lose money as well so they closely follow every decision Merck makes. Certain shareholders have the power to influence company decisions and help appoint members of power within the organization. A good example of investors with these powers would be the board of directors. The general employees within Merck effect the overall success of the firm through the decisions they make while on the job. Additionally, they are also affected by top management decisions that they can't control. If the CEO makes a poor choice that costs the company money, their jobs are at risk. The customers are very important because they are the ones buying the drug. In this case, customers are even more important because they are physically being affected by the product they are purchasing. The product needs to fill the customer's needs without harming them through adverse side effects. The customers would have enforceable claims on Merck because if...
Words: 633 - Pages: 3
...Conflict and Change Harvard Case Study Professor: Robert Lazer PhD Team: Zerrin Hejazi, Mark Klabonski, Elizabeth Lamb, Hari Thenneti Pandurangamoorthi, & Hareshkumar Surani The History of Merck U.S. sales office opened in and George Merck, Heinrich’s grandson, was appointed head of the U.S. branch Friedrich Jacob Merck opened Merck in Germany 1668 1827 Heinrich E Merck transformed the business and Merck began manufacturing 1887 Merck merged with Philadelphia pharmacy Sharp & Dohme 1891 The renamed company Merck & Co. opens for business 1953 2009 Merck merged with ScheringPlough Corporation and Organon BioSciences Pharmaceutical Industry • The average drug development time is over fifteen years with an average R&D expenditure of $800 million. • The FDA requires three phases of testing to assess safety and effectiveness. o Test results dictate what is displayed on the drug’s label and how the doctor will prescribe it. • Follow-up studies (Phase 5) can be performed to assess the drug after market release (Phase 4) and amend the drug label for improved sales. Pharmaceutical Success • 1981 to 2001, Merck experienced an upward trend on several industry metrics. • Their Return on Sales (ROS) for their Human Pharma line peaked at just over 40% in 2001 with an average of 24% . • The early 1990’s exhibited a downward trend just prior to Gilmartin assuming the role of CEO. Pharmaceutical Success ...
Words: 3826 - Pages: 16
...Abstract Merck & Company (Merck) is evaluating the possible acquisition of Medco Containment Services Incorporated (Medco). The Chief Operating Officer, Executive Vice President of Sales and Marketing, and the Chief Financial Officer have all stated their thoughts and concerns regarding this matter. It is my job to make the final recommendation to the Board of Trustees. Executive Summary Merck is a leading pharmaceutical manufacturer and Medco is a leading pharmacy benefits manager. Both companies have a strong hold on their piece of the market. In 1992, Merck had revenue of $9.7 billion while Medco recorded $2.2 in revenue.4 Benefits of the merger include: * Increased marketing potential through Medco’s accumulated data * Access into the Managed Care market * Decreased costs in sales and marketing efforts Risks include: * Merging of corporate cultures * Loss of R&D dollars due to subsidizing Medco * Regulatory and compliance threats. The stated price for the merger is $6.6 Billion. At the time of the merger, I would have recommended to the Board to proceed with the merger as benefits seem to out-weigh the risks. However, in looking back, due to the FTC findings stating the merger did create an unfair advantage to Merck, I would have to re-evaluate. Merck was unable to issue the intended Medco IPO which had a planned offer price of $20 to $22 per share. In 2003 announced its plan to spin off Medco to existing Merck shareholders...
Words: 1915 - Pages: 8
