Analysis on Merck

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Analysis on
Merck: Conflict and change

Merck is one of the biggest pharmaceutical companies in the world today. Although encountered with success, it still faces many problems today while trying to be the market leader competing against its competition. While being research and development driven company, Merck now has to go beyond R&D to stay competitive in the pharmaceutical industry. The main issue that seems to come up is that how far it can progress with the dual challenge of hitting peak annual financial performance while keeping the research pipeline full continued to weigh on senior management. Through the late 80s to early 90s, Merck was able to boast profits and sales through biochemistry drugs that were seen as breakthrough drugs in this new market. With this sudden boom competitors started to take notice and emulate Merck’s business model. This success also brought up a number of questions within Merck as a company; mainly how was Merck going to keep up with its numbers and keep pumping new drugs into the market. Analysis:

The new technologies and law made it easier for companies to market drugs. FDA allowed the direct to consumer advertising of prescription drugs. Newly developed drugs were put in the market within a matter of months and companies focused more on marketing and advertising their drugs. Smaller companies collaborated or merged with Merck’s competitors to enhance technology, drug discovery and development. Pharmaceutical companies actually doubled their sales force between 1995 and 2001 to 80,000 sales rep. In the early 1990s, the MCOs began taking control and restricting the type, prices and number of drugs on their formularies or approved list. The MCOs presence and control on pharmaceutical companies led to slow sales and growth. In this business, the duration of the drug development is longer. The value of the drug being evaluated and the length of the...
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