Merck & Co., Inc. is an American multinational pharmaceutical company headquartered in Rahway, New Jersey. The company does business as Merck Sharp & Dohme or MSD outside the United States and Canada. The company is ranked fifth on the list of largest biomedical companies by revenue.
The company's revenues are primarily from cancer treatments, vaccines, and animal health products. In 2024, 46% of the company's revenue, or $29.5 billion, came from sales of Keytruda (pembrolizumab), a PD-1 inhibitor used to treat various types of cancers, and 13% of the company's revenue, or $8.6 billion, came from sales of Gardasil, an HPV vaccine. In addition, 9% of the company's revenue, or $5.8 billion, came from the sales of animal health products.
The company is ranked 65th on the Fortune 500 and 76th on the Forbes Global 2000.
In 1891, Merck & Co. was established as the American affiliate of the Merck Group, founded by the Merck family, and the companies are still in trademark disputes in several countries over the right to use the name "Merck".
History Roots and early history
Merck & Co. traces its origins to its former German parent company the Merck Group, which was established by the Merck family in 1668 when Friedrich Jacob Merck purchased a pharmacy in Darmstadt. In 1827, Merck Group evolved from a pharmacy to a drug manufacturer company with the commercial manufacture of morphine. Merck perfected the chemical process of deriving morphine from opium and later introduced cocaine, used to treat sinus problems and to add to beverages to boost energy levels.
In 1887 a German-born, long-time Merck employee, Theodore Weicker, went to the United States to represent Merck Group. In 1891, with $200,000 received from E. Merck, Weicker started Merck & Co., with headquarters in lower Manhattan. That year George Merck, the 23-year-old son of the then head of E. Merck (and grandson of the founder) joined Weicker in New York. Merck & Co. operated from 1891 to 1917 as the US subsidiary of the Merck Group.
Nationalization After the U.S. entered World War I, due to its German connections, Merck & Co. was the subject of expropriation under the Trading with the Enemy Act of 1917. The government seized 80 percent of the shares owned by the German parent company and sold it. In 1919, George F. Merck (head of the American branch of the Merck family), in partnership with Goldman Sachs and Lehman Brothers, bought the company back at a U.S. government auction for $3.5 million, but Merck & Co. remained a separate company from its former German parent. Merck & Co. holds the trademark rights to the "Merck" name in the United States and Canada, while its former parent company retains the rights in the rest of the world; the right to use the Merck name was the subject of litigation between the two companies in 2016.
In 1925, George W. Merck succeeded his father George F. Merck as president. In 1927, the corporation merged with the Powers-Weightman-Rosengarten Company, a Philadelphia quinine manufacturer. George Merck remained president and Frederic Rosengarten became chairman of the board. In 1929, H. K. Mulford Company merged with Sharp and Dohme, Inc. and brought vaccine technology, including immunization of cavalry horses in World War I and delivery of a diphtheria antitoxin to Merck & Co.
In 1943, streptomycin was discovered during a Merck-funded research program in Selman Waksman's laboratory at Rutgers University. It became the first effective treatment for tuberculosis. At the time of its discovery, sanatoriums for the isolation of tuberculosis-infected people were a ubiquitous feature of cities in developed countries, with 50% dying within 5 years of admission.Antibacterial Agents. Chemistry, Mode of Action, Mechanisms of Resistance, and Clinical Applications. Anderson RJ, Groundwater PJ, Todd A, Worsely AJ. Wiley (2012). See Preface material. Although Merck's agreement with Rutgers gave it exclusive rights to streptomycin, at Waksman's request the company renegotiated the agreement, returning the rights to the university in exchange for a royalty. The university then set up non-exclusive licenses with seven companies to ensure a reliable supply of the antibiotic.
1950–2000 In the 1950s, thiazide diuretics were developed by Merck scientists Karl H. Beyer, James M. Sprague, John E. Baer, and Frederick C. Novello and led to the marketing of the first drug of this class, chlorothiazide, under the trade name Diuril in 1958. The research leading to the discovery of chlorothiazide, leading to "the saving of untold thousands of lives and the alleviation of the suffering of millions of victims of hypertension" was recognized by a special Public Health Award from the Lasker Foundation in 1975.
In 1953, Merck & Co. merged with Philadelphia-based Sharp & Dohme, Inc., becoming the largest U.S. drugmaker. Sharp and Dohme had acquired H. K. Mulford Company in 1929, adding smallpox vaccines to its portfolio. The combined company kept the trade name Merck in the United States and Canada, and as Merck Sharp & Dohme (MSD) outside these two countries.
In 1965, Merck & Co. acquired Charles Frosst Ltd. of Montreal (founded 1899), creating Merck-Frosst Canada, Inc., as its Canadian subsidiary and pharmaceutical research facility. Merck & Co. closed this facility in July 2010 but reemerged in 2011 as Merck Canada.
Maurice Hilleman, a scientist at Merck, developed the first mumps vaccine in 1967, the first rubella vaccine in 1969, and the first trivalent measles, mumps, rubella (MMR vaccine) in 1971. The incidence of rubella-associated birth defects fell from up to 10,000 per year in the U.S. to zero in the aftermath of the rubella vaccine's development. Hilleman also developed the first Hepatitis B vaccine and the first varicella vaccine, for chickenpox.
The company was incorporated in New Jersey in 1970. John J. Horan became CEO and Chairman in 1976, serving until 1985. Under his leadership, the company's investment in R&D grew threefold, and Merck became the largest pharmaceutical company in the world.
In 1979, Merck scientists developed lovastatin (Mevacor), the first drug of the statin class.
Merck scientist William C. Campbell and Satoshi Ōmura developed ivermectin for veterinary use in 1981, and later put it to human use against onchocerciasis in 1987–1988 with the name Mectizan; today the compound is also used against lymphatic filariasis, scabies and other parasitic infections.
In 1982, the company formed a joint venture, KBI Inc., with AstraZeneca. During the late 1980s and 1990s, the company also established joint ventures with DuPont to access research and development expertise, and with Johnson & Johnson to sell over-the-counter consumer medications. DuPont bought out Merck's stake in their joint venture (Dupont Merck Pharmaceuticals) in 1998, with Merck's then-CEO Raymond Gilmartin doubting the venture's contribution to the company's growth.
In 1985, Merck received approval for imipenem, the first member of the carbapenem class of antibiotics. Antibiotics of the carbapenem class play an important role in treatment guidelines for certain hospital-acquired and multi-drug resistant infections. P. Roy Vagelos became CEO and Chairman that year, succeeding Horan. Vagelos served until reaching the company's mandatory retirement age in 1994, succeeded by Raymond Gilmartin.
In 1991, Merck's Kelco subsidiary was responsible for volatile organic compound (VOC) emission pollution in the San Diego area. In 1996 Merck paid $1.8 million for polluting the air. New machines were installed to reduce smog emissions by a year.
In November 1993, Merck & Co. acquired Medco Containment Services for $6 billion. Merck & Co. spun Medco off ten years later.
Merck's supply chain reduction programme has been referred to as an example of successful change. Merck reduced its number of global suppliers from 40,000 to less than 10,000 during the period from 1992 to 1997.Genna, Albert, "How Merck Leverages Supply for Profit" in Purchasing, 4 September 1997, referred to in Moore, N. Y. et al. (2002), Implementing Best Purchasing and Supply Management Practices: Lessons from Innovative Commercial Firms, prepared for the US Air Force, Rand, p. 156, accessed on 1 October 2024
2001–2019
In May 2002, The Bill & Melinda Gates Foundation purchased stock in Merck.
From 2002 through 2005, the Australian affiliate of Merck paid publishing house Elsevier an undisclosed amount to produce eight issues of a medical journal, the Australasian Journal of Bone and Joint Medicine. Although it gave the appearance of being an independent peer-reviewed journal, without any indication that Merck had paid for it, the journal actually reprinted articles that originally appeared in other publications and that were favorable to Merck. The misleading publication came to light in 2009 during a personal injury lawsuit filed over Vioxx; 9 of 29 articles in the journal's second issue referred positively to Vioxx. The CEO of Elsevier's Health Sciences Division, Michael Hansen, admitted that the practice was "unacceptable". Elsevier initially said that it compiled reprinted articles and it did not consider such compilation a journal. It was later forced to retreat and apologize.
In 2005, Gilmartin retired as CEO following Merck's voluntary worldwide withdrawal of Vioxx. Gilmartin's tenure was criticized as abandoning Vagelos' commitment to corporate social responsibility. Former president of manufacturing Richard Clark was named CEO and company president.
In November 2009, Merck & Co. completed a merger with Schering-Plough in a US$41 billion deal. Although Merck & Co. was in reality acquiring Schering-Plough, the purchase was declared a "reverse merger", in which "Old" Merck & Co. was renamed Merck Sharp & Dohme, and Schering-Plough renamed as "Merck & Co., Inc." The maneuver was an attempt to avoid a "change-of-control" in order to preserve Schering-Plough's rights to market Remicade. A settlement with Johnson & Johnson was reached in 2011, in which Merck agreed to pay $500 million. Merck Sharp & Dohme remains a subsidiary of the Merck & Co. parent.
Richard Clark retired as CEO and company president in October 2011 and Kenneth Frazier became CEO.
In October 2013, Merck announced it would cut 8,500 jobs in an attempt to cut $2.5 billion from its costs by 2015. Combined with 7,500 job cuts announced in 2011 and 2012, the layoffs amounted to 20% of its workforce.
By 2014, research performed at Merck has led to U.S. FDA approval of 63 new molecular entities.
In August 2014, Merck acquired Idenix Pharmaceuticals for $3.85 billion.
In September 2014, the US Food and Drug Administration (FDA) approved Pembrolizumab (MK-3475) as a breakthrough therapy for melanoma treatment. In clinical trials, pembrolizumab provided partial tumor regression in about one quarter of patients, many of whom have not seen further progression of their disease in over 6 months of follow-up.
In December 2014, the company acquired Swiss biotechnology company OncoEthix for up to $375 million.
Between 2010 and 2015, the company cut around 36,450 jobs. During that time, the company sold its consumer health business to Bayer and narrowed the company's focus to immunology, vaccines, diabetes, emerging markets and medicines used in hospitals, like certain antibiotics.
In January 2015, Merck acquired Cubist Pharmaceuticals for $102 per share in cash or about $9.5 billion in total.
In July 2015, Merck and Ablynx expanded their 18-month-old immuno-oncology collaboration by four years, generating a potential $4.4 billion in milestone payments for the Abylnx. The company also announced it would spend $95 million up front collaborating with cCAM Biotherapeutics and its early-stage treatment similar to Keytruda. Merck & Co. will bring in CM-24, an antibody designed to block the immune checkpoint CEACAM1.