Merck Druggernaut: The Inside Story of a Pharmaceutical Giant

We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear.' It was the motto of George Merck, one of the early leaders of what would become one of the foremost pharmaceutical companies in the world, Merck & Co., Inc. But in her new book, The Merck Druggernaut, business journalist Fran Hawthorne looks at whether that vision is starting to fail the company in a highly competitive market U.S. Congress is considering regulating by, among other things, allowing the importation of cheaper drugs from Canada.

To a certain extent, Hawthorne's book dispels the image of greedy pharmaceutical companies growing rich by charging the sick and elderly too much for prescription medications. Merck has done its share of good deeds, like finding a cure for river blindness and distributing the drug to Africans for free, developing groundbreaking treatments for tuberculosis, high cholesterol, osteoporosis and AIDS, and allowing generic brands of its drugs to enter the marketplace. But on the flip side, Merck has fallen from favor with investors, its reputation as 'the biggest and most successful drug company in the world' slipping, with its profits declining and its stock price plummeting, for as stock market analyst Richard Evans notes, 'the economy has no respect for virtue.'

Although Merck is a company legendary for its secretive nature, Hawthorne was able to assemble its story by interviewing sales reps, factory workers and executives from Merck; as well as doctors who have dealt with the company, and rival sales reps who have competed with it.

Merck was started as a family-owned drug store in Frankfurt, Germany in 1668 by Friedrich Jacob Merck, and by 1827 it had begun manufacturing its own chemical alkaloids. Soon branching out into the United States, its scientists would eventually be tied to Nobel Prizes in Medicine for developing breakthrough drugs.

But the breakthroughs haven't been coming as often lately. It is painstaking work, which involves venturing into uncharted territory and tackling diseases that are not understood and vastly complex, with the average drug taking 12-15 years to go from discovery to a marketable product, and in the book Hawthorne details the path a new drug must take through various forms of testing to gain approval. And she also shows what has made Merck, from the recruiting of postdoctoral fellows with the greatest potential to keeping them and stimulating their creativity and ingenuity.

Lately this has become a challenge since it has become increasingly apparent that if the company is to maintain profitability it will have to concentrate on developing treatments for diseases that are 'chronic and serious ? chronic enough that people will need to keep taking the medication indefinitely, and serious enough that they won't dare stop.'

And on top of this, Big Pharma has recently come under public scrutiny, charged with overcharging for drugs, perhaps because it is spending too much money wining and dining doctors in an attempt to get them to prescribe their drugs, an unethical practice Hawthorne explores in depth in the book. One of the doctors interviewed says, 'I try to give everybody a little piece of the pie. If I like the rep, they get a little more.' The same doctor recalls that when he called a rep to request tickets for a particular Broadway show, 'the rep never called me back. His drug [competes with] other drugs that are very similar, so guess what? He's not going to get many prescriptions from me.'

To Merck's credit, it stopped issuing perks to doctors in 2001 on the grounds of integrity, although its sales reps wonder aloud if they will be able to compete while other drug companies continue the practice.Through her book, Hawthorne provides an inside look at how the pharmaceutical industry works and she poses an intriguing question: Are the big drug companies greedy by nature, extracting exorbitant fees from the sick and the elderly, or has the market economy made them that way out of the necessity for survival?