Sustainable Enterprises and Macro

marketing Dimensions

Merck: Global
Health and
Access to
Medicines
Presented by : Group -4
Arjun Appaiah -18034
Presented to:
Souparnika - 18046
Dr M R Suresh
Vignesh R – 18049
Shruthi -18122
MERCK- COMPANY
OVERVIEW

• Global research driven pharmaceutical

company founded in 1891.
• Merck is an international developer,
manufacturer and distributor of
pharmaceuticals .
• It is the ninth largest pharmaceutical
company in the world.
• It employs more than 60000 people and
it has 28 manufacturing plants and nine
research sites.
 • Merck products currently address 60% of
the top 20 global burdens of disease as
defined by the World Health
Organization(WHO).
• Pharma companies will not take active part
in HIV programmes as there is no
profitability.
Case facts • Vaccines: The vaccine producing capability
of developing countries is low
• Merck also shifted its focus from vaccine
markets in developed countries to
developing countries with help of Global
Alliance for Vaccination and
Immunization(GAVI) and GATES
foundation.
MERCK’S
STAKEHOLDERS
• Governments of different countries.
• Health organizations like WHO, UN ,
FDA.
• Non-Profit organizations (Bill & Melinda
Gates Foundation, Oxfam).
• People
• Pharmaceutical Firms
a) Generic
b) Proprietary
Core Issues

• Lack of proper infrastructure

in developing countries for
providing HIV
Medicines
• Pricing policies
• Patents and licensing
• Expanding the business in
developing nations and
Integrating Social Corporate
Responsibility with business
CSR Activities…
Philanthropic: Mission and vision of Merck
“Medicine is for people, not for profits”.
• In 2007 ,contributed $828 million in cash
contributions, products, medical programs.
• Ranked among top 2 donors for
philanthropic work(1999 -2007)
• Disaster relief: Includes donations of
medicines through established channels
and trusted partners .
• Access to Medicines and vaccines in Low
Income Countries.
Programs & policies:
a) Developing ACHAP in Botswana, 2000
b) Founding UN AAI, 2 new SRV’s, funding mechanisms
through Global fund and PEPFAR in 2003.

Ethical responsibilities: Adherence to the law (Registration etc) and

looked into aspects like
a) who is the ultimate beneficiary of the donation
b) Will the donation benefit society by increasing awareness of
ways to improve health and well-being and by enhancing
research into diseases?

Legal
a) Many companies are being subject to legal proceedings at
home and abroad.
b) Merck’s medical and legal teams are active partners to help
foster ethical promotional practices, helping to achieve
business goals by reducing risk and increasing compliance
with the laws and guidelines in a highly regulated
environment .
Economic Responsibilities (State of access 2008): As of
2008, Merck products were involved in treating 777,000 patients
in 125 countries
a) 80% of individuals obtained ARVs drugs in countries
where Merck didn’t profit.
b) 7% in countries with deep price discounts.
So, Merck were getting their main profits from only developed
countries.

Pricing policy : Merck adapts pricing through product donations,

flexible
differentiated pricing
a) All low and medium HDI countries with an adult HIV
prevalence rate of 1% or greater qualified for lowest
and not for profit prices
b) Countries in medium HDI category with an HIV
prevalence of less than 1% qualified for a reduced
price
c) For high HDI countries, Merc applied competitive,
market based pricing principle
Pricing policy updation: In 2007 Merck updated its pricing policy from HDI
based to United Nations Conference on Trade and Development’s (UNCTAD’s)
list of least developed countries based on economic factors rather than social
factors.

a) Under new policy, countries that received CRIXIVAN, STOCTIN

and ATRIPLA were guaranteed prices would not increase.
b) Prices at tier 1 countries, STOCRIN at $237, CRIXIVAN at $600
and ATRIPLA at $613 per patient per year.
c) Prices at developing countries and emerging market was
STOCRIN at $657, CRIXIVAN at $1029 and ATRIPLA at $1033.
d) All other countries paid the market prices.
Stuart Hart’s framework
LESSONS LEARNT IN
DEVELOPING
COUNTRIES
• Issues of Intellectual Property Rights in
South Africa
• Licensing and price equalization of
medicines lead to developing countries
in dire need taking the hit
• 95% of the infected resided in these
countries
• These countries lack medical
infrastructure
• Question of cost-effectiveness in
providing drugs to these countries
 • Issues and effects of patents,
licenses and intellectual property
rights on pricing
• Problems in providing medicines
and vaccines to those residing in
IMPLICATIONS developing countries at no profit
FOR THEIR prices
BUSINESS • Need for proper infrastructure and
facilities before venturing into the
MODEL country
• Need to satisfy the stakeholders as
well as aligning the company with
unwavering commitment to ethics
and integrity.
Conclusion
• Between 1999 and 2007, Merck consistently ranked among top 2
donors in the annual ranking. ($828 million)
• Merck’s had flagship programs like Patient assistance program, Merck
Medical outreach program and Mectizan donation program.
• Introduced Differential pricing policy with the help of Human
development Index and HIV prevalence as guidelines.
• Merck mass- produced the drug ISENTRESS before the FDA
approval just because to make the drugs available in shelves as soon
as possible.
• Merck also granted four non royalty bearing licenses to international
partnerships to develop and manufacture drugs.
• Shifted their focus to developing and emerging markets in the
vaccines market.
• Has addressed the people and profit dimension.
Thank you