Merck & Co.: Evolution, Challenges, and Growth

Merck & Co., Inc. traces its origins to the 17th century in Darmstadt, Germany, where it began as E. Merck, a family-owned apothecary that grew into one of the most respected pharmaceutical and chemical companies. In 1891, the company established a U.S. subsidiary, Merck & Co., which soon became a cornerstone of the American pharmaceutical landscape. After World War I, to demonstrate loyalty to the United States, George Merck transferred the company’s German-held stock to the U.S. government, and in 1919 the firm became publicly traded with underwriting by Goldman Sachs and Lehman Brothers. From its earliest years, Merck was recognized for pioneering research, a dedication to medical advancement, and its influential publication, *The Merck Manual of Diagnosis and Therapy*.Throughout the 20th century, Merck distinguished itself through groundbreaking discoveries and innovative therapies. It developed important drugs such as lovastatin, the first statin for cholesterol reduction; imipenem, a carbapenem antibiotic; and ivermectin, which transformed treatment of parasitic diseases and was distributed widely in global health programs. The company also established a reputation for public health leadership, launching initiatives such as Mectizan Donation Program and Merck for Mothers. Strategic acquisitions, including the bold purchase of Schering-Plough in 2009, expanded its pipeline and global reach. In 2014, Merck introduced Keytruda, the first FDA-approved anti-PD-1 immunotherapy, which revolutionized oncology and remains one of the most important cancer drugs worldwide.However, Merck’s journey has not been without major challenges. One of the most significant crises came with Vioxx, a painkiller that was withdrawn from the market in 2004 after being linked to increased cardiovascular risks. Allegations that Merck had delayed disclosure of critical safety data caused immense reputational and financial damage, and the scandal became a cautionary tale in pharmaceutical ethics and corporate governance. Beyond controversies, Merck has faced the constant industry challenge of patent expirations, which have placed pressure on the company to replenish revenues with new blockbusters as older ones, such as Zocor and Singulair, lost exclusivity.In recent years, Merck has pursued an aggressive strategy of innovation, portfolio diversification, and cost optimization. Keytruda has become its top revenue generator, driving billions in quarterly sales and gaining expanded approvals for multiple cancers. At the same time, Merck has invested heavily in vaccines, animal health, and cardiopulmonary therapies, acquiring Verona Pharma for \$10 billion to add a novel COPD treatment and entering licensing agreements such as its deal with Jiangsu Hengrui for a heart-disease candidate. The company has also advanced promising candidates like WINREVAIR for pulmonary arterial hypertension, next-generation HIV therapies, and pediatric vaccines. To support these initiatives, Merck has committed over \$12 billion to expand U.S. manufacturing and R\&D facilities while launching a multiyear restructuring program aimed at saving \$3 billion annually by 2027 through streamlining operations, reducing administrative overhead, and optimizing global facilities.Despite its strengths, Merck continues to navigate serious pressures. Patent expiry for Keytruda in 2028 looms as a critical turning point, forcing the company to accelerate pipeline development and strategic acquisitions to offset potential revenue loss. The firm also faced setbacks such as the temporary suspension of Gardasil vaccine shipments to China, which significantly impacted sales. Still, Merck’s resilience lies in its ability to adapt, learn from past struggles, and strategically reinvest in long-term growth areas.Today, Merck stands as a global pharmaceutical leader defined by a balance of innovation and caution, having evolved from a 19th-century German subsidiary into a multinational powerhouse. Its history reflects both scientific triumphs and ethical challenges, but its continued pursuit of transformative medicines, commitment to public health, and focus on operational efficiency suggest that Merck remains well-positioned to confront future challenges and sustain its legacy of improving global health.