Case | HBS Case Collection | September 2010

Merck: Investing in Science-Based Business (Abridged)

by Ananth Raman and Inga Katharina Maurer

Abstract

Ray Gilmartin faces a dilemma. His company's credibility has been damaged by the recent withdrawal of Vioxx, a multi-billion dollar drug. Moreover, the withdrawal of Vioxx would imply that Merck would fail to meet analysts' earnings expectations for 2005 unless Gilmartin cuts the R&D budget. Cutting the budget might hurt morale and productivity in Merck labs.

Keywords: Factories, Labs, and Plants; Cost Management; Production; Research and Development;

Citation:

Raman, Ananth, and Inga Katharina Maurer. "Merck: Investing in Science-Based Business (Abridged)." Harvard Business School Case 611-027, September 2010.