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Merck’s strategy set, partnership talks on

Merck’s strategy set, partnership talks on
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First Published: Sun, Nov 14 2010. 09 41 PM IST
Updated: Sun, Nov 14 2010. 09 41 PM IST
New Delhi: Merck Sharp and Dohme (MSD) India, an affiliate of the US-based Merck and Co. Inc., has completed its integration with Schering Plough Corp. and is all set with the roll-out of its India growth strategy.
Merck and Schering were merged in March 2009, and, a year later, the integration was completed. Merck, now ranked the second largest pharmaceutical firm in the world, is looking at gaining a leadership position in in the next five years.
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“In the emerging markets, which includes all of Latin America and Asia Pacific, we rank No. 5 post-merger. Within the emerging markets, Asia Pacific of course is a key component and so, we have identified seven key markets where we want to be No. 1 or No. 2,” said Ramesh Subrahmanian, senior vice-president, Merck & Co, and president (Asia Pacific) for MSD. The seven key markets for MSD include Russia and China.
MSD currently ranks No. 29 in India.
Following its merger with Schering Plough, Merck’s critical mass has increased and the company now has a breadth of portfolio relevant to emerging markets.
“Through the course of 2010, our focus initially was just getting the integration done so that we are clear about what the product portfolio looks like,” said Subrahmanian. “If we can maximize the portfolio of our current products coupled with our pipeline, we believe we have the basis on which we can grow faster than (the) industry.” With integration out of the way now, Merck has begun identifying the gaps in its operations.
According to Subrahmanian, despite its broad product portfolio in the emerging markets, backed by its pipeline, there are still going to be some gaps. So the company wants to be very thoughtful and selective about how it fills the gaps through branded generics or incremental innovation—all those things that will allow it to meet customer needs in the market. “This we might not be able to do on our own,” he said.
“The other thing that we are conscious of is that we need to develop capabilities. One is we need to build capacities in markets to be able to deal with the fact that across multiple therapeutic areas, diagnosis rates, treatment rates are very low. This has more to do with healthcare systems being underdeveloped. So, part of our code is how do we help and partner with the appropriate stakeholders,” said Subrahmanian.
For this purpose, Merck is now reaching out to commercial partners since the company agrees that it may not be able to reach every segment of the customer population by itself. “So, we may need commercial partnerships in order to create access to our products,” he said. “Thus, leveraging low-cost manufacturing partnerships, building networks with partners that will allow us to build broader access to the portfolio is going to be critical.”
While it has been looking for partners in India and is already in talks, Merck is certain that it will not partner or even acquire a firm simply to gain leadership position in one shot. Rather, with its current capacity in place, an extra headcount of 400 people added after merger, and existing market access, the company is looking for partnerships that could later even turn into an acquisition—which strategically fits in with its product portfolio and distribution network.
“Yes, every company is racing to reach the top position, as are we, but for us it is more important to create a value proposition rather than just sell our products,” said Subrahmanian.
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First Published: Sun, Nov 14 2010. 09 41 PM IST