Product details

In 2005, Merck was the world''s sixth-largest global pharmaceutical company. In November 2005, Merck announced a global cost-cutting campaign. Several factors prompted this move, including uncertainty in its discovery pipeline and the loss of sales revenue from the pain-reliever Vioxx, which was recalled in September 2004. Tens of billions of dollars in potential liability arose from the recall of Vioxx. Moreover, the company''s top-selling product, Zocor, would lose patent rights in mid-2006. When the flow of new medicines from Merck''s research and development pipeline dried up, analysts criticised the company for concentrating too much effort on a limited range of cures. The case discusses the restructuring plan of a pharmaceutical company which is facing problems such as: (1) unimpressive growth in research and development; (2) blockbuster product recall; and (3) loss on patent rights on its top selling drugs.