Merck buys Schering-Plough: first thoughts

By Derek Lowe

So after weeks of rumors, Merck has decided to buy Schering-Plough. This ends two eras - the one where S-P was one of the last mid-sized pharmaceutical companies, and the one where Merck grew mostly from the inside. I have to say, I'm sorry to see the end of both. Drug discovery is risky and complicated, and it needs as many different viewpoints and shots on goal as possible. Big mergers like this don't help the industry's ecology much. Today's merger isn't as disturbing as the Blob-like growth of Pfizer, but it's still not happy news. (Full disclosure: I used to work at Schering-Plough in the 1990s - a few tales from that era can be found here and here).

Does this deal make sense?


If you think that big drug company mergers make sense, then I suppose it does. The two companies have Vytorin, the combination cholesterol drug that's not going to be make anyone as much money as it was supposed to. And Schering-Plough has a promising cardiovascular drug and some other programs that will fit reasonably well into Merck's portfolio. The two main R&D sites are within a few miles of each other in New Jersey, so it'll be interesting to see how the staffing and facilities issues eventually get resolved (there are supposed to be cost savings in that area, naturally).

I'm still not happy about this one, but I'm clearly out of step. I miss the days when large drug companies could keep themselves going with their own research programs. I worry about the vitality of research under the present conditions. And I wonder what happens when there aren't any more big mergers to be made.

Derek Lowe blogs from inside the drug labs at In the Pipeline.

This article available online at:

http://www.theatlantic.com/business/archive/2009/03/merck-buys-schering-plough-first-thoughts/1329/