Pharmaceutical industry overview and market dynamics

Pharmaceutical Industries: Merck & Co., Inc.

Order ID: Benchmarks in the Rise of Big Gov. 1901 -- 1981

International Pharmaceutical Industry

The purpose of this work is to perform a general analysis of the international trends of the pharmaceutical industry in terms of global or local issues as well as the strategies of the leading company, Merck & Co., Inc. And to review the governmental policies toward the pharmaceutical industry.

The Global Pharmaceutical Industry/Supply Chain:

The pharmaceutical industry is global industry. Global pharmaceutical sales grew 10% at a constant rate in 2000 equaling $317.2 billion in total sales which was up from the 1999 amount of sales equaling $295.9 billion. Japan was the largest consumer in the 2000 pharmaceutical industry at 88% of total global consumption.

Investor Concerns:

The largest concerns of the investors in the industry are that:

Government action will make it harder to get patents on products giving a rise to generic drugs.

Medicare drug benefits could end up with legislation in Washington price-setting drugs.

Open-ended class action market

III. Trade in the Industry/Market & Network

Merck Anticipates Full-Year 2005 Earnings Per Share Range of $2.42 to $2.52. Continued growth and development of newer franchises is planned by Merck in 2005 as well as extending the recent launches of ZETIA and VYTORIN, which have been a success thus far. New products are planned to be launched. Plans for the second half of 2005 are inclusive of plans by Merck in submission of three vaccines to the FDA for their approval. The vaccines which are planned for submittal are as follows:

Rotavirus vaccine: "A 'highly contagious' virus that causes gastroenteritis and results in the hospitalization of nearly 50,000 children under age 5 each year in the United States."

HPV vaccine: "This vaccine is engineered to reduce human papillomavirus infection and complications of cervical dancer that kills more women than any other disease each year.

Shingles Vaccine: A Vaccine that reduces the pain that is part of the condition of shingles and is suffered by 1 million American adults per year.

Merck and Co., Inc. is a "global research-driven pharmaceutical company that focuses on discovering, developing, manufacturing and marketing a broad range of innovative products to improve human health both directly as well as through its joint ventures. Merck & Company, Inc. announced on September 30, 2004 "a worldwide withdrawal of VIOXX (rofecoxib) its arthritis and acute pain medication." According to the report the decision is 'effective immediately' and is 'based on a new, three-year data from a prospective, randomized placebo-controlled clinical trial, the APPROVe (Ademonatous Polyp Prevention on VIOXX) trial."

The stated adverse effects of stroke or heart attack have been cited to be caused by VIOXX in certain patients. Merck is presently reimbursing all customers for unused prescriptions which have been filled by the patient. "Recently announced by Merck on November 23, 2004 is that: "the quarterly dividend $0.38 per share on the company's common stock for the first quarter of 2005. The dividend is payable January 3, 2005 to stockholders of records at the close of business on December 3, 2004. Growth in the ZETIA and VYTORIN franchises are expected to continue. T

There are currently several candidates in Phase III that Merck plans to file in 2005 as well as Type 2 diabetes treatment and three vaccines. The fourth-quarter 2004 EPS anticipation is stated to be $0.48 to $0.53, which includes the impact of approximately "$700 to $750 million foregone sales of VIOXX. The result is anticipation by Merck for EPS guidance (2004 full-year) of $2.59 to $2.64. These amounts include withdrawal impact and next years negative affects of the DPS by $0.50 to $0.55."

Merck & Co., Inc. announced in a recent report that they had made submission to the U.S. Food and Drug Administration (FDA) PROQUAD, which is a vaccine for children. The composition of the vaccine is a cocktail like mixture of the chickenpox, measles, mumps and rubella vaccine. Also expected by Merck for submission is 'muraglitazar' which is the "first-in-class 'dual PPAR agonist for Type 2 diabetes treatment in collaboration with Bristol-Myers Squibb."(Merck & Co, Inc. 2004)

In a December 7, 2004 Press Release the announcement made by the Board of Directors of Merck & Co., Inc. that a "Special Board Committee to review the company's actions prior to Merck's voluntary withdrawal of VIOXX, to act for the Board in responding to shareholder litigation matter related to the withdrawal of VIOXX and to advise the Board with respect to any action that should be taken as a result of the review."

IV. Competitive Countries:

Competitive Countries in the Pharmaceutical Industry are with the United States as the top competititor with 48.20% of global sales and a 2000 sales figure of $152.9 billion and a 14% year-over-year growth. Europe follows the United States with 23.7% of global sales for the sum of %75.3 billion and an 8% year-over-year growth. Japan is the third top competitor with 16.2% of global sales in the amount of $51.5 billion and a 3% year-over- year growth followed by Latin America who claimed 6% of global sales for the sales figure of $18.9 billion and 9% year-over year growth. Asia, Africa and Australia follow Latin America with 5.9% of global sales equaling $18.7 billion and a 1-% year-over-year growth. The total sales for the pharmaceutical industry in 2000 were $317.20 billion with a 10% year-over-year growth.