Case | HBS Case Collection | November 2006 (Revised November 2007)

Strategy in the Twenty First Century Pharmaceutical Industry: Merck & Co. and Pfizer Inc.

by David J. Collis and Troy Smith

Abstract

The global pharmaceutical industry has gone through substantial changes in the last few decades and pharmaceutical firms face major challenges including headline-grabbing litigation, imminent patent expirations, new technologies, rising drug development costs, generic drug substitution, international competitors, and complex public policy issues. This case describes the pharmaceutical industry in 2006 including: the drug development process; threats from biotech and generics competitors; pharmaceutical manufacturing, selling, and marketing; and pharmaceutical consumption in Europe, the third world, and the U.S. Merck and Pfizer are analyzed in-depth and a contrast between Merck as a research-based firm opposed to mergers and Pfizer as a marketing powerhouse growing through acquisitions is developed. Thirteen exhibits give concrete focus to the issues of the case.

Keywords: Mergers and Acquisitions; Growth and Development Strategy; Product Development; Research and Development; Corporate Strategy; Pharmaceutical Industry; United States;

Citation:

Collis, David J., and Troy Smith. "Strategy in the Twenty First Century Pharmaceutical Industry: Merck & Co. and Pfizer Inc." Harvard Business School Case 707-509, November 2006. (Revised November 2007.)