Pharmaceutical Industry and Merck

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Merck, being on one of the biggest pharmaceutical companies in the world today, came from a meek beginning and still encounters many problems today while trying to maintain a lead amongst its competition. While being looked at as a research and development driven company, Merck now has to go beyond R&D to stay competitive in the pharmaceutical industry. Attracting talent to work for the company has never been a problem for Merck, but the bigger question was whether or not this talent would be able to keep Merck's profits at a maximum and keep developing drugs in the pipeline.
Through the late 80's to early 90's, Merck was able to boast profits and sales through biochemistry drugs that were seen as breakthrough drugs in this new market.
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Although Merck has encountered success, the organization has confronted weaknesses and disappointments. One weakness that Merck has confronted is the duration of the drug development, the value of the drug being evaluated and the length of the FDA application for drug approval. For example, of the 5,000 molecules that are discovered, only couple of hundred are investigated, only one enters into the market and only a third becomes a marketable success (Gilbert and Sarkar 3). A drug development time may take on average over 15 years and expenditure R & D total costs of about $880 million (Gilbert and Sarkar 2) (Exhibit 3). The length for and FDA application is at least 100,000 pages, which details the potential drug's usage, production, formula and labeling. Another weakness with Merck is that too much power is given to scientists in decision-making of candidate drugs. The MRL was somewhat the main decision-makers in organizing the drug development process including final say on whether Phase V or post-evaluation drug studies could be used. MRL, at one time, did not show a lot of emphasis on Phase V and wanted to move on after Phase III. Figures like Per Wold-Olsen, President of Human Health Europe, had to fight to get approval and funding for Phase V research. The third weakness is the inadequacies and lack of communication between marketing and research. For
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