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Revision as of 19:43, 8 November 2011

Merck & Co., Inc.
(Merck Sharp & Dohme (MSD) outside the United States and Canada)
Company typePublic
NYSE: MRK
Dow Jones Industrial Average Component
IndustryPharmaceuticals
Founded1891 as a subsidiary of Merck KGaA
1917 as an independent company
HeadquartersWhitehouse Station, New Jersey, United States
Key people
Richard T. Clark
(Chairman)
Kenneth Frazier
(President and CEO)
ProductsGardasil
Singulair
Propecia/Proscar
Zocor Vioxx Fosamax
See more complete products listing.
RevenueIncrease US$ 45.987 billion (2010)[1]
Decrease US$ 1.653 billion (2010)[1]
Decrease US$ 861 million (2010)[1]
Total assetsDecrease US$ 105.781 billion (2010)[1]
Total equityDecrease US$ 56.805 billion (2010)[1]
Number of employees
94,000 (2010)[1]
WebsiteMerck.com

Merck & Co., Inc. (NYSE: MRK), also known as Merck Sharp & Dohme or MSD outside the United States and Canada, is one of the largest pharmaceutical companies in the world. The Merck headquarters is located in Whitehouse Station, New Jersey, an unincorporated area in Readington Township. The company was established in 1891 as the United States subsidiary of the German company now known as Merck KGaA. In common with many other German assets in the United States, Merck & Co. was confiscated in 1917 during World War I and then set up as an independent company. Currently, it is one of the seven largest pharmaceutical companies in the world both by market capitalization and revenue.

Merck & Co. or MSD describes itself as a "a global research-driven pharmaceutical company. Merck discovers, develops, manufactures and markets a broad range of innovative products to improve human and animal health, directly and through its joint ventures." The Merck Company Foundation has distributed over $480 million to educational and non-profit organizations since it was founded in 1957.[2]

Merck publishes The Merck Manuals, a series of medical reference books. These include the Merck Manual of Diagnosis and Therapy, the world's best-selling medical textbook, and the Merck Index, a collection of information about chemical compounds.

History

Merck & Co. traces its origins to Friedrich Jacob 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—in addition to raw materials for pharmaceutical preparations—a multitude of other chemicals.

In 1891, George Merck established his roots in the United States and set up Merck & Co. in NY as the US arm of the family partnership, E. Merck (named for Emanuel Merck), which is now Merck KGaA. Merck & Co. was confiscated in 1917 during World War I and set up as an independent company in the United States. Between the wars and during World War II, the company was led by George W. Merck, who oversaw America's germ-warfare research at Fort Detrick. Today, the US company has about 51,000 (S&P NetAdvantage) employees in 120 countries and 31 factories worldwide. It is one of the top 7 pharmaceutical companies worldwide, larger than its German ancestor, which currently employs around 41,000 people in 67 countries.

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. (In July 2010, Merck announced that this would be one of several operations to be closed.)[3] The company was renamed Merck Canada in 2011.

In 2005, CEO Raymond Gilmartin retired at the age of 64 following Merck's voluntary worldwide withdrawal of Vioxx. Former president of manufacturing Richard Clark was named CEO and President of the company. In December 2010 Kenneth Frazier was announced CEO with Richard Clark Retiring in October 2011.

On December 10, 2007, the company's share price reached a five-year high of $60.77. However, the share price of Merck since trended down, reaching an intraday low of $20.05 per share on March 9, 2009.

In November 2009, Merck announced that it would merge with competitor Schering-Plough in a US$41 billion deal.[4][5][6][7] The purchase was a "reverse merger" in which Schering-Plough would be renamed Merck and continue as the surviving public corporation. The new company would be operated under the trade name Merck in the United States and Canada and elsewhere under the trade name MSD.

On May 4, 2010, Merck announced its 2010 first quarter financial results. The company reported, among other things, that its financial results were affected both by the merger with Schering-Plough and tax charges related to the recently enacted health reform legislation. During the early months of 2010, Merck's stock began a slow slide downward. The stock peaked at 41.03 on January 20, 2010. By April 22, 2010, the stock had fallen to 33.77, a loss of 17.7%. This loss of stock is almost equal to the loss of 17.6% the American pharmaceutical company Pfizer had during this same time period. The slide is most likely caused by the declining productivity and increasing cost of pharmaceutical development.

July 2011: Inline with an effort to save as much as $4.6 billion per year, Merck & Co. plans to cut an additional 12,000 to 13,000 employees or 14 percent of current Merck's total workforce of 91,000 employees by the year 2015.[8]

Corporate governance

As of February 25, 2011 the members of the board of directors of Merck & Co. are: Richard T. Clark, Leslie A. Brun, Thomas R. Cech, Ph.D., Kenneth C. Frazier, Thomas H. Glocer, Steven F. Goldstone, William B. Harrison, Jr., Harry R. Jacobson, M.D., William N. Kelley, M.D., C. Robert Kidder, Rochelle B. Lazarus, Carlos E. Represas, Patricia F. Russo, Thomas E. Shenk, Ph.D., Anne M. Tatlock, Craig B. Thompson, M.D., Wendell P. Weeks, and Peter C. Wendell.[9]

Products

Products on the market

Products from Schering-Plough

Products under development

Patient assistance programs

In the early 1950s, Merck & Co. was one of the first pharmaceutical companies to provide patient assistance programs in the U.S. to those unable to afford their medications.[11] Currently, Merck & Co. offers 7 patient assistance programs, each with specific eligibility requirements.[12][13]

Available programs

Vioxx

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 "neutralised" 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 impingement upon academic freedom.[14]

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.[15] 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..."[16] 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.[17] 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.[17] In November 2007, Merck proposed to pay $4.85 billion to settle most of the pending Vioxx lawsuits.[18][19] 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.[17]

On May 20, 2008, Merck was found liable for using deceptive marketing tactics to promote Vioxx and 30 states will split the $58 million settlement. The amount is the largest multi-state settlement against a pharmaceutical company.[20] All its new television pain-advertisements must be vetted by the Food and Drug Administration and changed or delayed upon request until 2018.[21]

Cordaptive

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.[22]

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.[23]

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.[24][25]

The drug was later approved by the EMA on July 3, 2008.[26][27]

Phony medical journal

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.[28] In 2009, the CEO of Elsevier's Health Sciences Division, Michael Hansen, admitted that the practice was "unacceptable".[29]

Medicaid overbilling

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.[30] They alleged that Merck failed to pay proper rebates to Medicaid and other health care programs and paid illegal remuneration to health care providers.[31] 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 federal government received more than $360 million, and 49 states and Washington, DC, over $290 million. One whistleblower received a $68 million reward.[30][32] Merck made the settlement without an admission of liability or wrongdoing.[33]

Environmental record

Merck & Co. used methylene chloride which is an animal carcinogen and is on the United States Environmental Protection Agency's list of pollutants. To get rid of this problem Merck chemists and engineers discovered a new way to manufacture products without using methylene chloride. The new way of creating chemicals seemed to have fewer negative environmental effects. Merck has also changed its equipment to protect the environment. Merck installed a computerized distributed control system that runs chemical reaction steps more effectively and has increased the process of operations by 50 percent. With the new machines, they have eliminated the need for the disposal and storage of harmful waste. The biological oxygen demand was reduced by 75% with a new process to help with water waste and other polluting waste.[34] In 1991, Kelco, owned by Merck, was responsible for 1/3 of the volatile organic compound (VOC) emission pollution in the San Diego area. The ground level ozone was causing health problems such as lung tissue damage and making the lungs easily vulnerable to harmful bacteria.[35] In 1996 Merck paid 1.8 million dollars in a settlement that accused them of polluting the air. In addition, new machines were installed to cut the air pollution that the company's facilities were giving off. The new machines reduce the smog level emissions by 680,000 lb (310,000 kg) a year.[36]

Isentress

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.[37] Isentress was approved by the FDA on October 12, 2007.[38]

Singulair

The FDA is looking into a link between the Merck drug Singulair, suicide and other psychological side effects, and is conducting research to see if Singulair should be reviewed further. Singulair works on blocking the Leukotriene pathway in both Asthma and Allergic Rhinitis.[39]

See also

References

  1. ^ a b c d e f "2010 Form 10-K, Merck & Co., Inc". United States Securities and Exchange Commission.
  2. ^ Princeton University and The Merck Company Foundation Announce Creation Of New Global Health Scholars Program and Lecture Series
  3. ^ "Montreal plant among 17 closed by drugmaker Merck". The Star. Toronto. July 8, 2010.
  4. ^ Singer, Natasha (March 10, 2009). "Merck to Buy Schering-Plough for $41.1 Billion". The New York Times. Retrieved November 14, 2009.
  5. ^ "Merck and Schering-Plough to Complete Merger Today" (Press release). Merck & Co. November 3, 2009. Retrieved November 13, 2009.
  6. ^ "New Merck Begins Operations" (Press release). Merck & Co. November 4, 2009. Retrieved November 13, 2009.
  7. ^ "Notice of Reorganization Event". November 12, 2009. Retrieved November 13, 2009. {{cite web}}: Check |url= value (help)
  8. ^ http://thestockmarketwatch.com/stock-market-news/recent-events/health/merck-plans-13k-job-cuts/11068
  9. ^ "Board of Directors". Retrieved February 25, 2011.
  10. ^ Freepatentsonline.com, Merck's patent for "a pharmaceutical composition and method of counteracting HMG-CoA reductase inhibitor-associated elevated transaminase levels"
  11. ^ "Merck to Create New Patient Assistance Program for Vaccines" Retrieved on May 20, 2008.
  12. ^ "Patient Assistance - Available Prescription Assistance Programs From Merck & Co." Retrieved on May 20, 2008.
  13. ^ Merck Patient Assistance Programs
  14. ^ Rout, Milanda (April 1, 2009). "Vioxx maker Merck and Co drew up doctor hit list". The Australian. Retrieved April 26, 2009. [dead link]
  15. ^ Finance.senate.gov
  16. ^ Elsevier
  17. ^ a b c Courts Reject Two Major Vioxx Verdicts, The New York Times, May 30, 2008
  18. ^ Merck proposes $4.85B Vioxx settlement, USA Today, November 12, 2007
  19. ^ "Merck's outlook revised to developing from negative on Vioxx agreement - Moody's". forbes.com. Thomson Financial. November 12, 2007. Retrieved May 4, 2009.
  20. ^ Arizona gets $2.3 Million from Vioxx Settlement 92.3 KTAR Retrieved on May 19, 2008
  21. ^ Merck Agrees to Settlement Over Vioxx Ads, The New York Times, May 20, 2008]
  22. ^ Yahoo.com, Merck niacin drug controls cholesterol
  23. ^ Merck & Co., Inc. press release - Two Merck Medicines Recommended for Approval in the European Union Retrieved on April 30, 2008.
  24. ^ Merck & Co., Inc. press release - Merck Receives Not Approvable Letter from FDA for MK-0524A (ER niacin/laropiprant) Retrieved on April 30, 2008.
  25. ^ Carey, John (April 29, 2008). "FDA Rejects Merck's Cordaptive". BusinessWeek. Retrieved November 13, 2009.
  26. ^ 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 Retrieved on July 26, 2008.
  27. ^ "Tredaptive European Public Assessment Report". European Medicines Agency. Retrieved November 13, 2009.
  28. ^ Singer N (May 13, 2009). "Merck paid for medical 'journal' without disclosure". The New York Times. Retrieved June 17, 2009.
  29. ^ "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.
  30. ^ a b Johnson, Carrie (February 8, 2008). "Merck to Pay $650 Million In Medicaid Settlement". The Washington Post. Retrieved February 8, 2010.
  31. ^ USDOJ.GOV, Merck to Pay More than $650 Million to Resolve Claims of Fraudulent Price Reporting and Kickbacks. February 7, 2008
  32. ^ Pharmalot.com: Ed Silverman, Merck To Pay $670 Million Over Medicaid Fraud.
  33. ^ "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. [dead link]
  34. ^ P2pays.org
  35. ^ ET 10/96: Repairing a legacy of pollution by Kelco
  36. ^ U.S. settles $1.8 million pollution case with Merck and Monsanto | Newsroom | US EPA
  37. ^ Merck.com FDA Advisory Committee Unanimously Recommends Accelerated Approval of ISENTRESS (raltegravir), Merck's Investigational Oral Integrase Inhibitor, for Treatment of HIV
  38. ^ "FDA approval of Isentress (raltegravir)". U.S. Food and Drug Administration (FDA). June 25, 2009. Retrieved November 15, 2009.
  39. ^ "FDA looks into Singulair, risks of suicidal thoughts", USA Today

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