Merck's Acquisition of Medco and the FTC Challenge

From the liberal point of view, the FTC and the EC should recognize the Boeing-McDonnell Douglas merger as an international issue, not a national issue, so that it should restrain autonomy of state, in this case the U.S., preventing from intervention to protect domestic interests. However, in the case of Boeing-Mc Donnell Douglas, both antitrust authorities, specifically the European Commission, acted in a protectionist manner keeping domestic interests. In a study on 290 proposed acquisitions screened by the EC during 1990, it was found that although European merger and acquisition regulators claim to be protecting competition and consumers, in fact, the more harm suffered by European rival firms when the acquire is coming from the outside the EU, the greater the likelihood of European regulatory intervention against the proposed merger or acquisition . The EC’s focus on competitors rather than consumers was revealed by this study.

The competitor would provide similar services that could potentially hinder PHC’s progress toward accomplishing its service and profitability goals.

Physicians were looking for assistance with HMO and PPO insurance companies and rising healthcare cost and PhyCor, Inc. was there to provide the administrative management. PhyCor, Inc. is considered a physician practice management firm, or PPM, that bought out other management firms to become one of the largest firm due to their ability to negotiate managed care contracts. What attracted physicians to PPMs was their ability to “lower cost and increase revenues” (Burns, L.R., Bradley, E.H., & Weiner, B.J., 2011). PhyCor, Inc. was able to merge large physician groups and specialty clinics creating revenue in the millions, and continued to grow. They grew for several years before the values in stock starting falling, unsatisfied physicians, and

Pfizer is the largest American pharmaceutical company and one of the largest pharmaceutical companies in the world. It competes with Merck and Glaxo, and markets such well-known medications as Celebrex and Viagra. However, the pharmaceutical industry as a whole has undergone changes in recent years with significant consolidation taking place and with increased scrutiny regarding the ways in which drugs are developed, tested and marketed. In addition, recent controversies have erupted regarding Merck's drug Vioxx, and Pfizer has been the target of unwanted publicity regarding its painkiller Celebrex. This research considers the strategic position of Pfizer, including its strengths and weaknesses as well

Two other items that were covered in the agreement between Raisio and Johnson & Johnson pertained to payments that would be made to Raisio. Raisio would receive royalties on the sales of all products containing Benecol and they would also receive milestone payments. The milestone payments were an incentive for Raisio and an insurance policy for McNeil. If McNeil were to introduce Benecol products into major markets, they needed to make sure that there

A merger is a partial or total combination of two separate business firms and forming of a new one. There are predominantly two kinds of mergers: partial and complete. Partial merger usually involves the combination of joint ventures and inter-corporate stock purchases. Complete mergers are results in blending of identities and the creation of a single succeeding firm. (Hicks, 2012, p 491). Mergers in the healthcare sector, particularly horizontal hospital mergers wherein two or more hospitals merge into a single corporation, are increasing both in frequency and importance. (Gaughan, 2002). This paper is an attempt to study the impact of the merger of two competing healthcare organization and will also attempt to propose appropriate

According to Rusli, the merger would create more in-store traffic for CVS and increase both companies’ consumer base. This merger gave CVS the opportunity to expand both its own small pharmacy benefits manager business and mail order business. CVS’s opportunity to take advantage of Caremark’s pharmacy benefits manager business allowed it to take advantage of the mail order business as well that had begun cutting into drug stores’ revenue (Rusli, 2013). By providing its customers with a unique set of services and gaining the market power to control costs, CVS Caremark gained a competitive advantage. Unless competitors like Walgreens and Rite Aid find a way to respond to CVS Caremark’s strategy, it will be difficult to remain competitive with this firm for long. Overall, the merger was a great strategic move on behalf of both organizations, which helped ensure the current success of CVS Caremark.

While some have identified Merck as a visionary company dedicated to a "core values and a sense of purpose beyond just making money" (Collins & Porras, 2002, p. 48), others point out corporate misdeeds perpetrated by Merck (e.g., its role in establishing a dubious medical journal that republished articles favorable to Merck products) as contradictory

Merck has initiated towards combining functional departments with a core cross-functional structure that focused on strategies and implementation. For instance, Ray Gilmartin established the Worldwide Business Strategy Teams (WBST) in 1995. The WBST, which consisted of 12 or 15 members from the US Human Health, marketing and MRL’s internal group, focused on managing, improving efforts and coordinating therapeutic franchises worldwide. Cross-functional groups can promote resources for category drugs, decide if marketable drug be evaluated in Phase V studies, look at possible impact sales and push for initiatives. If cross-functional groups are designed and perform correctly, then they will be

The Pfizer case provides an introduction to external analysis. The case highlights the pharmaceutical industry, which has enjoyed extraordinary long-run profitability. The case also demonstrates how broad changes in broad environmental factors (i.e. demographics, technology, culture, etc.) have an impact on industry competition. The case is not especially complex, so it is not overwhelming as a first case.

What takeover defenses did Warner use to fend off Pfizer? What other defenses could they have used?

In application, people might view Merck’s duties in different ways. For example, one might argue that as a company Merck only has responsibilities to release effective and safe medications and to make a profit to stay in business. On the other hand, it could be argued that as a pharmaceutical company Merck has special obligations to follow leads (like ivermectin) because they may greatly benefit human beings or save lives despite being unprofitable.

Since its humble beginning as a small drugstore, Merck has placed a large amount of importance on improving the health and well-being of its customers. As drug patents expire and genetic forms of their top products become available, Merck’s strategy is to do the unexpected; instead of raising the price of their older products in favor of patent protected new drugs, Merck focuses on reducing their cost in order to better compete with their generic counterparts. Additionally, Merck’s plan for growth now encompasses a much more aggressive pursuit of new drugs in their pipeline through extensive research. Merck became the second largest health care company in the world after the merger with Schering-Plough in 2009 and has

With each passing day the health care industry is experiencing an increase in participants due to its perfect competition nature. Due to this increase the industry participants, the industry has vicious competition which in effect leads to an increased in the cost of doing business. Smaller companies within the industry are hard hit by this competition due to their limited resources and therefore find it hard to remain relevant within the industry. Due to the looming threat of closure and liquidation, small companies must explore various strategies they may use to remain in operation. On the other hand large hospitals that are looking to eliminate competition and at the same time improve on their market share and in effect their revenues, merge with those that are struggling with low profitability. These mergers are beneficial to the smaller struggling companies since they provide increased savings on company overheads and availability of specialized machinery. Growth is also expected due to the increased market share as well as the good will already established by the large company. Contrary to popular opinion, mergers are not always between a large and a small company. In the healthcare industry two small companies may come together in order to pool their resources together and be in a position to compete against the large companies.

FTC claimed that based on various analysis and evidence, proposed merger between Staples and Office Depot will harm competition in office superstore chain market and raise market price which will lessen customers’ welfare. Nevertheless, two parties of merger casted doubt on every detailed statement, and interpreted that this merger will reduce costs, broaden scale of economies, improve economic efficiency, and optimize resource allocation, and then lower market price efficiently. Finally, the Court chose to agree with FTC’s contention.