| Type | Public |
|---|---|
| Traded as | NYSE: MRK 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) |
| Products |
Gardasil |
| Revenue | US$ 45.987 billion (2010)[1] |
| Operating income | US$ 1.653 billion (2010)[1] |
| Net income | US$ 861 million (2010)[1] |
| Total assets | US$ 105.781 billion (2010)[1] |
| Total equity | US$ 56.805 billion (2010)[1] |
| Employees | 94,000 (2010)[1] |
| Website | Merck.com |
Merck & Co., Inc. (NYSE: MRK), dba 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.
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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]
As of February 25, 2011[update] 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]
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]
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.
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]
In 1987, Merck & Co. began a program with UNICEF to donate it's new drug Mectizan to "all that need it for as long as needed"[22] 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 it's primary vector the Black Fly.[23] However, when studies in the 1980's showed how effective the drug was at treating and preventing the disease, the WHO agreed to use it instead of it's previous strategies. Merck's involvment is considered a key factor in the success against the disease all over the world[24] and the decision to donate the entirety of the drug to all those in need of it is used as a case study in corporate ethics today.
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.[25]
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.[26]
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.[27][28]
The drug was later approved by the EMA on July 3, 2008.[29][30]
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.[31] In 2009, the CEO of Elsevier's Health Sciences Division, Michael Hansen, admitted that the practice was "unacceptable".[32]
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.[33] They alleged that Merck failed to pay proper rebates to Medicaid and other health care programs and paid illegal remuneration to health care providers.[34] 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.[33][35] Merck made the settlement without an admission of liability or wrongdoing.[36]
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.[37] 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.[38] 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.[39]
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.[40] Isentress was approved by the FDA on October 12, 2007.[41]
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.[42]
Merck KGaA said it had negotiated exclusive rights to www.facebook.com/merck in March 2010, and has begun legal action against Facebook for allowing Merck & Co. to take over administration of the page.[43]
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