Merck & Co.: Strategic Analysis
Prepared by: Manbir Singh;
Company name: Merck & Co.;
NAICS: Pharmaceutical Preparation Manufacturing;
NAICS Code: 325412;
NAICS Industry: Biotech and Pharma;
NAICS Sector: Healthcare;
Primary Stock Market: NYSE;
Stock Ticker Symbol: MRK;
Revenue for 2017: 40.12 billion USD
Merck & Co. (known as Merck) is one of the leading pharmaceutical companies worldwide. They are known as Merck & Co. in the US and Canada but known as MSD everywhere else around the globe.
Merck was “founded in 1891” (2018) and aims to make a difference in the lives of people all over the world through its innovative medicines, vaccines, and animal health products (2018). Their mission is “to save and improve as many lives as possible, globally, through these products and always puts patients first” (2018, p. n).
George W. Merck’s famous spoken words “we must try to remember that medicine is for the patient. We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear. The better we have remembered it, the larger they have been. We cannot rest till the way has been found, with our help, to bring our finest achievement to everyone.”
To help millions around the world, Merck operates globally, having a footprint in more than 140 countries. Merck employees approximately 69,000 employees worldwide, and has their headquarters in Kenilworth, New Jersey. In 2017, the company had $40.1 billion in revenue and continues to grow.
Merck has been guided by rich legacy and have had many pioneers lead the way for Merck, including the legendary scientist, Maurice Hilleman who impacted public health and is credited with having developed more human and animal vaccines than any other scientist, helping to extend human life expectancy and improving the economies of many countries. And, Bill Campbell, who has a Nobel Prize for Physiology or Medicine, championed the discovery and development of treatment for river blindness that is being distributed throughout the world.
Two years ago, in 2016, Merck ; Co. celebrated their 125th anniversary as a global health care leader and continues to advance in research and healthcare. Since 1891, Merck’s researchers have created break-through discoveries to help treat and prevent illness. Merck focuses on a wide range of therapeutic areas, just to mention a few: diabetes, infectious disease, oncology, vaccines, and animal health. Merck has continuously changed the world through their history. They discovered vitamin B1, the first measles and mumps vaccine, vaccine for HPV that causes cervical and other cancers, cold remedies antacids, medicines for heart disease, and statins to treat high cholesterol. In addition, Merck is focused on Animal Health and has developed animal health vaccines and antibiotics.
Today, Merck is focused on making scientific advancements on hepatitis C, HIV, Alzheimer’s disease, Ebola, cardio-metabolic disease, antibiotic-resistant “superbugs”, diabetes, immune-oncology, and more than 30 different cancers.
Merck has been recognized for their research and leading the way in corporate responsibility. Merck donates more than one billion treatments in areas effected by river blindness, of which three countries have been verified as free of river blindness by the WHO – World Health Organization. Merck is also focused in fighting against mortality through Merck for Mothers, where they aim to “create a world where no woman has to die from complications of pregnancy and childbirth.”
Overview of the Company
Vision, Mission, and Values
Merck’s Vision statement, as it is as stated on their website, is “To make a difference in the lives of people globally through our innovative medicines, vaccines, and animal health products. We are committed to being the premier, research-intensive biopharmaceutical company and are dedicated to providing leading innovations and solutions for today and the future.” (Helping the World Be Well, 2018) This goes hand in hand with their mission statement, “To discover, develop and provide innovative products and services that save and improve lives around the world.” (Helping the World Be Well, 2018) Both of these, vision and mission statement, support George Merck’s statement of helping patients. Merck’s values help guide everything the company does as a whole, and they serve as a foundation for the company’s decisions and actions. The company is guided by the belief of doing the right thing and are committed to the best interests of their stakeholders – the broad spectrum of people and communities whose lives are touched by what Merck does. Merck clearly outlines the values and standards that are fundamental to their success:
¥ Patients First – all of the company’s actions are measured against the responsibility to those who use or need the company’s products
¥ Respect for People – Responsive to the needs of the company’s employees and their families
¥ Ethics and Integrity – Interactions with all segments of society must be transparent and reflect high standards
¥ Innovation and Scientific Excellence – Identify and meet the critical needs of patients and customers through continuous innovation
Targeted Customers and Key Products
Merck continues to work to address many of the world’s unmet medical needs and has ongoing research to address these needs. Merck focuses on the following Therapeutic Areas: Cardiovascular Diseases, Diabetes and Endocrinology, Infectious Diseases, Neurosciences, Oncology, Respiratory and Immunology, Vaccines, and Women’s Health. Their current pipeline consists of 12 Phase 2 Programs, 19 Phase 3 Programs, and 3 programs Under Review:
¥ Phase 2 Programs: Advanced solid tumors, Bilary Tract Cancer, Cutaneous Squamous, Cell Carcinoma, Cytxmegalovirus, Diabetes, HIV, Lunch Cancer, Melanoma, Ovarian Cancer, Pediatric Neurofibromatosis, Prostate Cancer, Schizophrenia
¥ Phase 3 Programs: Bacterial Infection, Bacterial Pneumia (2), Breast Cancer, Cough, Ebola Vaccine, Endometrial Cancer, Esophageal Cancer, Gastric Cancer, Heart Failure, Herpes Zoster Vaccine, Live Cancer, Nasopharyngeal cancer, Pancreatic cancer, Prostate Cancer, Pneumoconjugate Vaccine, Renal Cancer, Small Lunch Cancer
¥ Under Review: HIV(2), Pediatric Hexavalent Vaccine
With a wide variety of products, Merck touches almost every gender and age group across the spectrum. However, from 2014 to 2017, the following products were their top sellers based on revenue (in million US $): Keytruda, Januvia, Gardasil.
Keytruda is a prescription medicine used to treat a kind of lung cancer and may be used with chemotherapy. Keytruda “is an immunotherapy and it works with your immune system to help fight cancer.” (2018) This drug was and is still very highly targeted to consumers who have cancer. Keytruda has proven to be an effect drug to help people who are fighting cancer.
Januvia “is a once-daily prescription pill that, along with diet and exercise, helps lower blood sugar levels in adults with type 2 diabetes.” (2018) Januvia is targeted for patients that suffer from 2 diabetes.
Gardasil “Helps protect girls and women ages 9 to 26 against cervical, vaginal, vulvar, and anal cancers and genital warts caused by 9 types of HPV.” (2018) Gardasil is targeted for woman ages 9 to 26 and not makes at all as male body parts are different than women.
As it can be seen, Merck targets various patients over a large spectrum.
Merck in the news
With its rich history and strong value, Merck has some of the strongest leaders. Recently, the current Merck CEO, Kenneth C. Fraizer, was in the spotlight for standing against the US President, Donald Trump in summer of 2017. Fraizer served on of Mr. Trump’s business advisory councils in the early days of Trump’s administration, but the president’s outburst of white nationalist violence, the CEO distanced himself from the president. Mr. Fraizer was the grandson of a man born into slavery and felt the “responsibility to take a stand against extremism”, he wrote on Merck’s Twitter account at the time. (Gelles, 2018)
The confrontation lead to Mr. Fraizer’s resignation from the president’s manufacturing council. As expected, the Merck board supported Mr. Fraizer’s decision to resign 100% and backed up his decision. In a public statement from Mr. Fraizer, he resigned from the President’s American Manufacturing Council and clearly stated that “America’s leaders must honor our fundamental values by clearly rejecting expressions of hatred, bigotry and group supremacy, which run counter to the American ideal that all people are created equal” (cite). Mr. Trump then, in response to Mr. Fraizer, responds on Twitter “Now that Ken Fraizer of Merck Pharma has resigned from President’s Manufacturing Concil, he will have more time to LOWER RIPOFF DRUG PRICES!” (cite). The last back from the president didn’t affect Mr. Fraizer’s decision. However, it empowered other leaders; 3 days later, Chief Executives of Intel and Under Armour also stepped down from the advisory groups. Then, 2 days later (total of 5 days later), additional (dozens) of the country’s top Chief Executives had followed.
Mr. Fraizer did not respond to Mr. Trump’s lash back. Mr. Fraizer has made it clear that he has little interest in dwelling on his feud with Mr. Trump and would rather stay out of politics. However, he could not help but to speak out against the president’s actions last year.