Analyzing the strategy by Ken Frazier, Merck & Co CEO

The weekly magazine The Economist has published in its latest issue an analysis of the strategy developed over the last ten years by the pharmaceutical group Merck & Co.. The CEO Ken Frazier has been leading the group since 2011, when Januvia (diabetes) and Gardasil (cervical cancer) were its leading drugs, yet the return on R&D was low. Differently from many other pharmaceutical groups that have closed R&D centers and lowered investments, Frazier has decided not to cut R&D funding, but to increase it. This decision has led to develop–among others–Keytruda, the cancer blockbuster that yielded $3.8bn in 2017 and has potential to reach $10.7bn before 2030. Additionally, over the last few years, Merck has developed its Vaccines division–generating $6.5bn in sales in 2017 and its Animal health division. The company also had to address the revenue drop due to the generic versions of Zetia and Vytorin and of Januvia and Janumet, expected to lose market share following the launch of novel therapies by Eli Lilly and Novo Nordisk. The author concludes by acknowledging that Frazier’s strategy has allowed the group to grow despite difficulties and to secure future development thanks to its pipeline.
(Source The Economist)