Merging Merck and Schering-Plough
Why giant drug-makers need to join forces
It’s no surprise that drug-makers Merck and Schering-Plough have decided to merge, said Lionel Laurent in Forbes. The pharmaceutical industry is undergoing a “major facelift” in 2009—the $41-billion Merck-Schering Plough deal comes a little more than a month after Pfizer’s announcement that it was buying rival Wyeth for $68 billion. This is just the kind of consolidation you’d expect as the patents on the companies’ blockbuster drugs expire, threatening profits.
Merck’s Monday announcement of its offer for Schering Plough is still welcome news, said Andrew Willis in the Toronto Globe and Mail. “At a time when many CEOs and boards are fretting about the future, and unwilling to commit cash to takeovers, the big pharmaceutical companies are rationalizing operations and preparing for a better tomorrow.” That should give other businesses a confidence boost.
Maybe, but this is not a sign of strength, said Douglas A. McIntyre in 24/7 Wall Street. No matter how much Merck and Schering-Plough talk about the “synergy” this deal uncorks, it’s all about saving $3.5 billion a year “in a rough economy and in a world where Big Pharma companies are losing many of their profitable drugs as their patents expire.”
The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
Quiz of The Week: 11 – 17 October
Quiz Have you been paying attention to The Week’s news?
-
The Week Unwrapped: Can bullfighting win over young Spaniards
Podcast Plus, is online fandom inherently unhealthy? And is Putin’s economy running out of gas?
-
Heirs and Graces: an ‘enthralling’ deep dive into the decline of nobility
The Week Recommends Eleanor Doughty explores the ‘bizarre fascination’ with the British aristocracy