Merck & Co.

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Not to be confused with Merck KGaA, the original parent company, whose American assets were seized during World War I creating this company.
Merck & Co., Inc.
(Merck Sharp & Dohme (MSD) outside the United States and Canada)
Type Public
Traded as NYSEMRK
Dow Jones Industrial Average Component
S&P 500 Component
Industry Pharmaceuticals
Founded 1891 as a subsidiary of Merck KGaA
1917 as an independent company
Headquarters Whitehouse Station, New Jersey, United States
Key people Kenneth Frazier
(Chairman, President and CEO)

Zocor Vioxx Fosamax

See more complete products listing.
Revenue Increase US$ 48.047 billion (2011)[1]
Operating income Decrease US$ 7.334 billion (2011)[1]
Net income Decrease US$ 6.272 billion (2011)[1]
Total assets Decrease US$ 105.128 billion (2011)[1]
Total equity Decrease US$ 56.943 billion (2011)[1]
Employees 76,000 (Dec 2013)[2]

Merck & Co., Inc. (NYSEMRK), d.b.a. Merck Sharp & Dohme, MSD outside the United States and Canada, is an American pharmaceutical company and one of the largest pharmaceutical companies in the world. Merck headquarters is located in Whitehouse Station, New Jersey, though in 2013 the company announced it would be relocating to Kenilworth, New Jersey by 2015.[3] The company was established in 1891 as the United States subsidiary of the German company now known as Merck KGaA. Merck & Co. was confiscated by the US government during World War I and subsequently established as an independent American company. It is the world's seventh largest pharmaceutical company by market capitalization and revenue.

Merck publishes The Merck Manuals, a series of medical reference books for physicians, nurses, and technicians. These include the Merck Manual of Diagnosis and Therapy, the world's best-selling medical textbook, and the Merck Index, a compendium of chemical compounds.

In 2012 the company received the "Facility of the Year"-Category Winner for Facility Integration Award for the Vaccine Bulk Manufacturing Facility (VBF) Program of Projects in Durham, North Carolina, USA.[4]


Merck & Co. traces its origins to Jacob Friedrich Merck, who purchased a drug store in Darmstadt, Germany, in 1668, and also to Emanuel Merck, who took over the store several generations later in 1816. Emanuel and his successors gradually built up a chemical-pharmaceutical factory that produced raw materials for pharmaceutical and other preparations.

In 1891, George Merck emigrated to the United States and set up Merck & Co. in New York as the US arm of the family partnership, E. Merck (named for Emanuel Merck), which is now Merck KGaA. In keeping with a national wartime policy, Merck & Co. was confiscated in 1917 and re-established as an independent American company. Until the end of World War II, the company was led by George W. Merck. Merck & Co. hold the rights to the name in North America, while its former parent company retains the rights in the rest of the world.[5]

In 1929, H.K. Mulford Co merged with Sharpe and Dohme, Inc. This company brought to the future Merck & Co, Inc vaccine technology, including immunization of calvary horses in World War I and delivery of a diphtheria antitoxin in 1925.[6]

In 1953, Merck merged with Philadelphia-based Sharp & Dohme, Inc., founded by Alpheus Phineas Sharp and Carl Friedrich Louis Dohme in 1845, becoming the largest US drugmaker.[7][8] The merger combined Merck's strength in scientific research and chemical manufacturing with Sharp & Dohme's sales and distribution system and its marketing expertise. The combined company kept the trade name Merck in the United States and Canada, and as Merck Sharp & Dohme (MSD) outside North America.

In 1965 Merck acquired Charles E. Frosst Ltd. of Montreal (founded 1899) and created Merck-Frosst Canada, Inc., as its Canadian subsidiary and pharmaceutical research facility. Merck closed this facility in July 2010,[9] and the company was renamed Merck Canada in 2011.

The company was incorporated in New Jersey in 1970.[2] It has an operating subsidiary, KBI Inc., which was originally formed as a joint venture with AstraZeneca.[2]

In November 1993, Merck completed a $6 billion purchase of Medco Containment Services Inc., one of the largest mail-order pharmacy and managed-care drug companies.[10]

In November 2009, Merck announced that it would merge with competitor Schering-Plough in a US$41 billion deal.[11][12][13][14] Although Merck was in reality acquiring Schering-Plough, the purchase was structured on paper as a "reverse merger", in which "Old" Merck was renamed Merck Sharpe & Dohme, and Schering-Plough renamed as "Merck & Co., Inc." so that it could, technically, continue as the surviving public corporation.[15] The maneuver was an attempt to preserve Schering-Plough's rights to market Remicade, which was ultimately decided by arbitration.[16] The merger was completed on 2009-11-04.

As of December 2013, the US company had approximately 76,000 employees in 120 countries with 31 factories worldwide. It is one of the world's seven largest pharmaceutical companies.

The Merck Company Foundation has distributed more than $480 million to educational and non-profit organizations since it was founded in 1957 (and $740 million in overall charitable distributions).[17][18] On December 7, 2012, the foundation announced that it was ending its donations to the Boy Scouts of America because of "its policy that excludes members on the basis of sexual orientation", which "directly conflicts with the Merck Foundation's giving guidelines."[19]

In October 2013, Merck has announced it will cut 8,500 jobs in an attempt to cut $2.5bn (£1.5bn) from its costs by 2015. The company's shares rose 2.35% to $48.73 in New York trading after it announced the cuts. The new losses, combined with 7,500 job cuts announced in 2011 and 2012, amount in total to 20% of its workforce.[20]

In June 2014 Merck announced its acquisition of Idenix Pharmaceuticals for approximately $3.85 billion.[21] On September 4 2014, the US Food and Drug Administration (FDA) approved Pembrolizumab (MK-3475) as a breakthrough therapy for melanoma treatment.[22] On September 17 2014, it was announced that Merck had licenced its Phase III chronic plaque psoriasis drug candidate, Tildrakizumab (MK-3222), to Sun Pharmaceutical, potentially making the company more than $80 million.[23]

Corporate governance[edit]

In 2005, CEO Raymond Gilmartin retired following Merck's voluntary worldwide withdrawal of Vioxx. Former president of manufacturing Richard Clark was named CEO and company president. Clark retired in October 2011 and Kenneth Frazier became CEO.

As of 23 April 2014, the company's CFO will be Robert M. Davis, formerly CFO of Baxter International.[24] Davis replaces Peter N. Kellogg, who held the post from 2007.[24]

Patient assistance programs[edit]

Merck & Co. was one of the first American pharmaceutical companies to offer assistance to those unable to afford its medications, beginning a program in the 1950s.[25] Merck & Co. offers seven patient assistance programs, each with specific eligibility requirements.[26][27]

Case histories[edit]


In 1999, the U.S. Food and Drug Administration (FDA) approved Vioxx (known generically as rofecoxib), a Merck product for treating arthritis. Vioxx was stronger than existing medications, while easier on the stomach than established anti-inflammatory drugs such as naproxen. Vioxx became one of the most prescribed drugs in history. According to internal e-mail traffic released at a later lawsuit, Merck had a list of doctors critical of Vioxx to be "neutralized" or "discredited." "We may need to seek them out and destroy them where they live," wrote an employee. Also alleged were intimidation of researchers and infringement upon academic freedom.[28]

Thereafter, studies by Merck and by others found an increased risk of heart attack associated with Vioxx use when compared with naproxen. There was no indication of this risk in the original placebo-controlled safety trials, and it was possible that the effect was more related to naproxen decreasing the risk of heart attacks than one of Vioxx increasing the risk. Merck adjusted the labeling of Vioxx to reflect possible cardiovascular risks in 2002.

On September 23, 2004, Merck received information about results from a clinical trial it was conducting that included findings of increased risk of heart attacks among Vioxx users who had been using the medication for over eighteen months.[29] On September 28, 2004, Merck notified the FDA that it was voluntarily withdrawing Vioxx from the market, and it publicly announced the withdrawal on September 30. The FDA has since recommended that Vioxx be put back on the market, but with a more prominent warning regarding cardiovascular risks on its label.[citation needed]

On November 5, 2004 the medical journal The Lancet published the results of its analysis of the available studies. It concluded that "the unacceptable cardiovascular risks of Vioxx (rofecoxib) were evident as early as 2000..."[30] The journal's editors criticized Merck for having kept the drug on the market as long as it did before withdrawing it, and also criticized the FDA for its failure of regulatory oversight.

About 50,000 people have sued Merck claiming that they or their family members have suffered medical problems such as heart attacks or strokes after taking Vioxx.[31] The New York pension fund also sought lead plaintiff status in this case on behalf of all investors that had lost money.[32] In 2005, Merck was found liable in the first case that went to trial and the plaintiff was awarded $253.4 million in damages; however, the judgement was subsequently reduced to $20 million and then, upon appeal, the verdict was reversed in 2008.[31] In November 2007, Merck proposed to pay $4.85 billion to settle most of the pending Vioxx lawsuits.[33][34] The settlement will require that claimants provide medical proof of having suffered a heart attack or a stroke and show they received at least 30 Vioxx pills. This proposed settlement is generally viewed by industry analysts and investors as a victory for Merck, considering that original estimates of Merck's liability reached as high as $50 billion. As of mid-2008, plaintiffs have prevailed in only three of the twenty cases that have reached juries, all with relatively small awards.[31]

On May 20, 2008, Merck settled for $58 million with 30 states alleging that Merck engaged in deceptive marketing tactics to promote Vioxx.[35] All its new television pain-advertisements must be vetted by the Food and Drug Administration and changed or delayed upon request until 2018.[36]


In 1987, Merck & Co. began a program with UNICEF to donate its new drug Mectizan to "all that need it for as long as needed"[37] in an effort to combat Onchocerciasis, also known as river blindness, primarily in Africa. Up to that point, the World Health Organization had fought the disease through the use of insecticides to lower the population of its primary vector, the Black Fly.[38] However, when studies in the 1980s showed how effective the drug was at treating and preventing the disease, the WHO agreed to use it instead of its previous strategies. Merck's involvement is considered a key factor in the success against the disease all over the world,[39] and the decision to donate the entirety of the drug to all those in need of it is used as part of the Mectizan Donation Program that covers countries such as Yemen and in African countries.[40]

More than 700 million people have been treated since the inception of the program with 80 million people still undergoing treatment in Africa, Latin America, and Yemen. Blindness caused by onchocerciasis is decreasing and there are regions of Latin America and Africa that have been shown to have completely eliminated the disease altogether.[40]


On September 4, 2007, Merck & Co. introduced the experimental drug Cordaptive, which can both raise HDL and lower LDL (combining an extended-release form of the B vitamin niacin with laropiprant, a novel compound intended to inhibit flushing or redness of the face). Cordaptive caused 18% drop in levels of LDL-C00, a 26% drop in triglycerides, and a 20% increase in HDL-C. Merck's cholesterol statin drug Zocor has seen sales plunge since its patent expired in 2006. In addition, Merck and partner Schering-Plough Corp. jointly market two other cholesterol drugs, Zetia and Vytorin.[41]

On April 24, 2008, the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) has recommended approval of the combination, to be marketed in Europe as Tredaptive.[42]

On April 28, 2008, the FDA issued a "not approvable" letter for Cordaptive. In the FDA's letter, the agency rejected the proposed trade name CORDAPTIVE for MK-0524A.[43][44]

The drug was later approved by the EMA on July 3, 2008.[45][46]

Phony medical journal[edit]

From 2002 through 2005 the Australian affiliate of Merck sponsored the eight issues of a medical journal, the Australasian Journal of Bone and Joint Medicine, published by Elsevier. Although it gave the appearance of being an independent peer-reviewed journal, without any indication that Merck had paid for it, the journal actually reprinted articles that originally appeared in other publications and that were favorable to Merck. The misleading publication came to light in 2009 during a personal injury lawsuit filed over Vioxx; 9 of 29 articles in the journal's second issue referred positively to Vioxx.[47] In 2009, the CEO of Elsevier's Health Sciences Division, Michael Hansen, admitted that the practice was "unacceptable".[48]

Medicaid overbilling[edit]

A US Justice Department fraud investigation began in 2000 when allegations were brought in two separate lawsuits filed by whistleblowers under the False Claims Act.[49] They alleged that Merck failed to pay proper rebates to Medicaid and other health care programs and paid illegal remuneration to health care providers.[50] On February 7, 2008 Merck agreed to pay more than $650 million to settle charges that it routinely overbilled Medicaid for its most popular medicines. The settlement was one of the largest pharmaceutical settlements in history. The federal government received more than $360 million, plus 49 states and Washington, DC, received over $290 million. One whistleblower received a $68 million reward.[49][51] Merck made the settlement without an admission of liability or wrongdoing.[52]

Environmental record[edit]

Merck & Co. once used methylene chloride, an animal carcinogen on the United States Environmental Protection Agency's list of pollutants, as a solvent in some of its manufacturing processes. Merck chemists and engineers subsequently replaced the compound with others having fewer negative environmental effects. Merck has also modified its equipment to protect the environment, installing a distributed control system that coordinates chemical reactions more efficiently and expedites manufacturing by 50 percent, eliminating the need for the disposal and storage of harmful waste. Biological oxygen demand has also been reduced.[53]

In 1991, Merck's Kelco subsidiary was responsible for volatile organic compound (VOC) emission pollution in the San Diego area. Ground level ozone was causing lung tissue damage by exposure to harmful bacteria.[54]

In 1996 Merck paid $1.8 million for polluting the air. New machines were installed to reduce smog emissions by 680,000 lb (310,000 kg) a year.[55]


Raltegravir (Isentress), Merck's HIV integrase inhibitor was unanimously recommended for accelerated approval by the FDA's Advisory Committee on September 5, 2007. Isentress works by acting on a specific enzyme in HIV, integrase, that allows the RNA from HIV to become part of human DNA in the replication process.[56] Isentress was approved by the FDA on October 12, 2007.[57]


The FDA is looking into a link between Merck's Singulair and suicide and is considering further studies of the drug. Singulair blocks the leukotriene pathway in asthma and allergic rhinitis.[58]


Merck is being sued over allegations that it failed to warn patients of alleged persistent sexual dysfunction, loss of libido, impotence, severe depression, cognitive impairment, Peyronie’s disease, penile shrinkage and gynecomastia from Propecia.[59]


In December 2013, Merck agreed to pay a total of $27.7 million dollars to 1,200 plantiffs in a class action lawsuit alleging that the company's osteoporosis drug had caused them to develop osteonecrosis of the jaw. Prior to the settlement, Merck had prevailed in 3 of 5 so-called "bellweather" trials. Approximately 4000 cases still await adjudiction or settlement as of August 2014.[60]

See also[edit]

Notes and references[edit]

  1. ^ a b c d e "10K Form". Merck. 
  2. ^ a b c Merck & Co., Inc. (27 Feb 2014). Merck & CO, Inc 2013 FORM 10-K (Report).
  3. ^ Ransdell Pierson (October 1, 2013). "Merck to slash annual costs by $2.5 bln, cut 8,500 jobs". Reuters. 
  4. ^ 2012 Facility of the Year Awards Category Winners [1] Accessed 2012-12-20.
  5. ^ Merck Group: The History of Merck.[2] Accessed 2012-09-03.
  6. ^ "Our History". Retrieved 7 Aug 2014. 
  7. ^ Time Magazine: Merck's Merger, March 16, 1953. Retrieved 2012-09-03.
  8. ^ The New York Times: Key Facts About Merck, November 3, 2005. Retrieved 2012-09-03.
  9. ^ "Montreal plant among 17 closed by drugmaker Merck". The Star (Toronto). July 8, 2010. 
  10. ^ "Merck & Co. completes Medco purchase". November 19, 1993. Retrieved January 14, 2014. 
  11. ^ Singer, Natasha (March 10, 2009). "Merck to Buy Schering-Plough for $41.1 Billion". The New York Times. Retrieved 2009-11-14. 
  12. ^ "Merck and Schering-Plough to Complete Merger Today" (Press release). Merck & Co. November 3, 2009. Retrieved 2009-11-13. [dead link]
  13. ^ "New Merck Begins Operations" (Press release). Merck & Co. November 4, 2009. Retrieved 2009-11-13. [dead link]
  14. ^ "Notice of Reorganization Event". November 12, 2009. Retrieved 2009-11-13. 
  15. ^ Edwards, Jim (November 10, 2009). "Merck Legally Changed Its Name 3 Times to Achieve Reverse Merger With Schering". CBS News. Retrieved 2012-09-02. 
  16. ^ Merck's News Release: Merck and Johnson & Johnson Reach Agreement on Distribution Rights for Remicade and Simponi, April 15, 2011. Retrieved 2012-09-03.
  17. ^ [3]
  18. ^ "Princeton University and The Merck Company Foundation Announce Creation Of New Global Health Scholars Program and Lecture Series" (PDF). Retrieved 2012-06-05. 
  19. ^ Scouts for Equality: Merck pauses Boy Scout Funding, accessed December 10, 2012
  20. ^ "Merck cuts another 8,500 jobs". BBC News. October 1, 2013. 
  21. ^ "Merck acquires Idenix". Genetic engineering & biotechnology news. June 9, 2014. 
  22. ^
  23. ^
  24. ^ a b "Merck Replacing CFO with Baxter Exec". Drug Discovery & Development (United States: Advantage Business Media). Associated Press. March 27, 2014. Archived from the original on March 29, 2014. 
  25. ^ "Merck to Create New Patient Assistance Program for Vaccines"[dead link] Retrieved May 20, 2008.
  26. ^ "Patient Assistance – Available Prescription Assistance Programs From Merck & Co." Retrieved May 20, 2008.
  27. ^ Merck Patient Assistance Programs[dead link]
  28. ^ Rout, Milanda (April 1, 2009). "Vioxx maker Merck and Co drew up doctor hit list". The Australian. Retrieved 2009-04-26. 
  29. ^[dead link]
  30. ^ Elsevier[dead link]
  31. ^ a b c Courts Reject Two Major Vioxx Verdicts, The New York Times, May 30, 2008
  32. ^ "NY state pension fund sues Merck". CNN. November 30, 2004. Retrieved Jul 11, 2013. 
  33. ^ "Merck proposes $4.85B Vioxx settlement". August 28, 2003. Retrieved 2012-06-05. 
  34. ^ "Merck's outlook revised to developing from negative on Vioxx agreement – Moody's". Forbes. Thomson Financial. November 12, 2007. Archived from the original on 2011-06-28. Retrieved 2009-05-04. [dead link]
  35. ^ Arizona gets $2.3 Million from Vioxx Settlement 92.3 KTAR Retrieved May 19, 2008
  36. ^ Merck Agrees to Settlement Over Vioxx Ads, The New York Times, May 20, 2008]
  37. ^ Merck supports the worldwide fight against river blindness, UNICEF
  38. ^ "Ivermectin History". February 24, 1981. Retrieved 2012-06-05. 
  39. ^ Onchocerciasis: Africa's victory over river blindness., Africa Recovery, Vol.17 No. 1 (May 2003), page 6
  40. ^ a b Mectizan Donation Program
  41. ^, Merck niacin drug controls cholesterol[dead link]
  42. ^ Merck & Co., Inc. press release – Two Merck Medicines Recommended for Approval in the European Union Retrieved April 30, 2008.
  43. ^ "Merck Receives Not Approvable Letter from FDA for MK-0524A (ER niacin/laropiprant)". Merck & Co., Inc. press release. Retrieved April 30, 2008.
  44. ^ Carey, John (April 29, 2008). "FDA Rejects Merck's Cordaptive". BusinessWeek. Retrieved 2009-11-13. 
  45. ^ Merck & Co., Inc. press release – TREDAPTIVE (nicotinic acid /laropiprant) Approved in the European Union: New Lipid-Modifying Therapy to Treat LDL-C, HDL-C and Triglycerides[dead link] Retrieved July 26, 2008.
  46. ^ "Tredaptive European Public Assessment Report". European Medicines Agency. Retrieved November 13, 2009. 
  47. ^ Singer N (May 13, 2009). "Merck paid for medical 'journal' without disclosure". The New York Times. Retrieved 2009-06-17. 
  48. ^ "Statement From Michael Hansen, CEO Of Elsevier's Health Sciences Division, Regarding Australia Based Sponsored Journal Practices Between 2000 And 2005" (Press release). Elsevier. May 7, 2009. Retrieved November 20, 2009. "It has recently come to my attention that from 2000 to 2005, our Australia office published a series of sponsored article compilation publications, on behalf of pharmaceutical clients, that were made to look like journals and lacked the proper disclosures. This was an unacceptable practice, and we regret that it took place." 
  49. ^ a b Johnson, Carrie (February 8, 2008). "Merck to Pay $650 Million In Medicaid Settlement". The Washington Post. Retrieved February 8, 2010. 
  50. ^ "Merck to Pay More than $650 Million to Resolve Claims of Fraudulent Price Reporting and Kickbacks". US Department of Justice. February 7, 2008. Retrieved 2012-06-05. 
  51. ^ Silverman, Ed (February 7, 2008). "Merck To Pay $670 Million Over Medicaid Fraud". Retrieved 2012-06-05. 
  52. ^ "Merck Resolves Federal and State Investigations Related to Certain Past Pricing And Certain Past Sales and Marketing Activities". Merck. February 7, 2008. Retrieved February 8, 2010. 
  53. ^
  54. ^ "ET 10/96: Repairing a legacy of pollution by Kelco". Retrieved 2012-06-05. 
  55. ^ "U.S. settles $1.8 million pollution case with Merck and Monsanto | US EPA". Retrieved 2012-06-05. 
  56. ^ "FDA Advisory Committee Unanimously Recommends Accelerated Approval of ISENTRESS (raltegravir), Merck's Investigational Oral Integrase Inhibitor, for Treatment of HIV". Retrieved 2012-06-05. 
  57. ^ "FDA approval of Isentress (raltegravir)". U.S. Food and Drug Administration (FDA). June 25, 2009. Retrieved 2009-11-15. 
  58. ^ Weise, Elizabeth (March 28, 2008). "FDA looks into Singulair, risks of suicidal thoughts". USA Today. Retrieved 2012-06-05. 
  59. ^ Financial Review, Looking at care with a critical ey e, PUBLISHED: 26 September 2012
  60. ^ "Merck agrees to proposed $27.7 million settlement over Fosamax lawsuits | Reuters". 

External links[edit]