This Article explains Merck

[Anonymous]

Big pharma contributed big$$$ to the GOV in hopes they would be in their good graces with the reform and that failed miserably. Perhaps our leaders should have used the "Politician Outreach Program".

 

[Anonymous]

Big pharma contributed big$$$ to the GOV in hopes they would be in their good graces with the reform and that failed miserably. Perhaps our leaders should have used the "Politician Outreach Program".

They don't use the bogus programs they force on us instead money was thrown at the government. Was someone held accountable for that waste of millions.

 

[Anonymous]

They don't use the bogus programs they force on us instead money was thrown at the government. Was someone held accountable for that waste last of millions.

Former CEO Richard Clark threw cash at Washington, took a picture with the president and other pharma CEO's last year to show solidarity and now left Merck with tens of millions. Now he's on the board of directors at Corning (the windows company) collecting stock options for nothing. Must be nice.

 

[Anonymous]

Former CEO Richard Clark threw cash at Washington, took a picture with the president and other pharma CEO's last year to show solidarity and now left Merck with tens of millions. Now he's on the board of directors at Corning (the windows company) collecting stock options for nothing. Must be nice.

But what a small price for Corning to pay Clark considering the significant business acumen he brings to them. They are indeed lucky and fortunate to have acquired such a brilliant mind for business.

 

[Anonymous]

But what a small price for Corning to pay Clark considering the significant business acumen he brings to them. They are indeed lucky and fortunate to have acquired such a brilliant mind for business.

Petty comment after the holidays.

Every time I watch "It's a Wonderful Life", I think of Dick Clark as Mr. Potter.

Wonder what happened to Mr. Potter. Did he go with Corning?

 

[Anonymous]

It is amazing how performance dictates your compensation at Merck unless you are in upper management. They have their inner circle and it is obvious with the ridiculous cash and opportunities thrown their way.

 

[Anonymous]

It is amazing how performance dictates your compensation at Merck unless you are in upper management. They have their inner circle and it is obvious with the ridiculous cash and opportunities thrown their way.

and look how skillfully they have guided the ship...

what a joke...

FU MERCK!!

 

[Anonymous]

This article from Pharmalot.com also helps explains Merck. Definitely pay attention to the paragraphs regarding pharmaceutical companies purging a lot of experienced employees for young business graduates who only look at numbers without taking some historical experience/tendencies into consideration. The bottomline, novice number crunchers alone can't save this company. You do need some people from different backgrounds and with different levels of experiences to help fix the problems. Go figure, a bunch of younger number crunching yes people don't have all of the answers to save Merck.


The Op-Ed: Pharma Should Not Be Run By Finance
20 Comments
By Ed Silverman // July 1st, 2011 // 8:20 am


Pipelines are shriveling. Revenue is falling. Plants are closing. Employees are being shown the door. Signs of an industry in decline, to be sure. Not that pharma lacks the commitment to attempt a turnaround, but these developments reflect, in part, the ascendance of the finance team. In the view of industry veteran and consultant Daniel Hoffman, this emphasis on numbers crunching threatens to turn pharma into a version of the US auto industry. And since we like mixing things up, we asked him to write what amounts to a guest column. Why? We like the idea of livening up the usual menu of items with input from a loyal reader, but also one who has experience in the trenches and a refreshing point of view. We hope you enjoy this contribution. Here are his thoughts…

Control of Pharma Operations by Finance: Sign of a Declining Industry
By Daniel Hoffman, PhD and president of Pharmaceutical Business Research Associates

It is no secret that pharma is going through a rough decade. Over the past ten years, the industry has lost $1 trillion of capitalization. Some equity analysts even suggest that pharma company shares would trade at higher multiples if they labeled themselves as consumer products companies that just happen to run pharma operations. According to one report, this year alone, pharma will lose control over more than 10 blockbusters with combined annual sales nearing $50 billion. And next year, meds with another $44.6 billion in annual sales will lose patent protection.

As top-selling older products fall off the table, compounds in the pipeline show scant potential for replacing these lost revenues. In fact, industry productivity at pursuing its lifeblood mission - developing new compounds that substantially advance the standards of care - has steadily declined. Over the past decade, an annual average of 30 applications for new molecular entitites have been submitted to the FDA. This is down from 45 submissions during 1996 and reflects a 9 percent to 11 percent annual decline that has occurred for some time.

According to equity analysts, this slow pace has created a qualitative change to the point where “research is no longer a core competency.” While the R&D slowdown offers customers fewer compelling reasons to buy new products, payors around the world are also showing ever-increasing resistance to paying the premium prices demanded by branded drugs.

At the same time, the weekly drumbeat of scandals involving off-label marketing, ghostwritten and fudged studies, Medicaid fraud and slanted promotions take their toll - the cost of defending prosecutions and paying fines, as well as eroded public confidence. More important, they have caused many industry customers to try shutting down communication channels that pharma uses to differentiate its brands. Medical specialty societies have been limiting industry-sponsored CME, while medical schools and teaching clinics restrict access of their physicians to pharma’s sales reps.

So amid this perfect storm, how has the industry responded? For the most part they’ve addressed the matter in three ways: cutting R&D, laying off experienced people and raising prices. In a less-is-more approach to new drug development, many big drugmakers have reduced R&D spending - between 2009 and 2012, Pfizer will have cut spending by 9.2 percent, AstraZeneca by 11 percent, GlaxoSmithKline by 11.6 percent and Sanofi by 8.7 percent.



Then there are layoffs. In an economy beholden to short-term horizons, manufacturers are managing according to the trends of their quarterly earnings and/or net income. In line with that imperative, pharmas continued their bottom line growth by cutting SG&A, principally through staff reductions. Last year, pharma led all commercial sectors in terms of the absolute number of layoffs. Only government and non-profits put more people onto the streets.

While layoffs during hard times are inevitable in a private enterprise economy, an ability to raise prices during the worst recession in 70 years is not. Over the last several years, pharma exercised this cartel prerogative by virtue of patent protection and regulatory entry barriers. In 2010, the industry raised drug prices an average 6.9 percent, following a 6.6% increase the year before.

Yet the sure sign that pharma has not figured a way out of its quandary is not the shrinking volume of new products or the apparent lack of well-defined strategies for a changed environment. That indicator appears in the fact that pharma has defaulted its operational management to finance.

As manufacturing executives, finance people possess neither the scientific and technical acumen of R&D, the creative touches of marketers or the people skills of sales. Perhaps to make these shortcomings appear less obvious, the finance wizards have worked through their henchmen in human resources to systematically eliminate people with extensive knowledge of the industry and its functional operations.

People over age 50, many with hard-earned wisdom, have been shown the door and replaced by 30-year old, business school graduates. With due allowance for exceptions, many of the latter have been miseducated to believe that they can manage all commercial entities, regardless of the industry, with spreadsheets containing the same formulas and ratios.

In their cognitive framework, concepts such as strategic sense, historical tendencies and the intuition borne of experience don’t even exist because insights from those sources have not been adequately quantified and stated in graphic form. Numbers constitute their only reality. As managers, finance people deal in measurement without substance and data without context.

At a time when business research can point the way to new concepts, product lines and organizational approaches, finance managers disdain such insights. Instead they decree that managers in marketing, managed care and other functions should eschew insight and consider business research a commodity function. Finance thereby empowers its hatchet men and women in the purchasing department to select proposals from larger suppliers that offer volume discounts in preference to discernment.

This mismanagement by finance is evident in the extent to which many pharma departments are handcuffed to so-called preferred, value-preferred and agency-of-record suppliers. In the last of these arrangements, finance and/or its purchasing functionaries deploy their blunderbuss wisdom by selecting the most frequent or costliest engagements that a particular department has outsourced during the previous year.

Then they approach one of the largest suppliers of that service and offer them a monopoly to perform one or more of these common/expensive functions in return for an annual cost guarantee amounting to 10 percent to 15 percent below the previous year’s cost. In this manner, research on customer needs and competitor planning becomes equivalent to buying pork bellies or soybeans.

An example appears in a memo that the “vice-president for customer insight” at a big pharma sent to all of his 120-plus charges earlier this year. With a subtlety capable of hitting the broad side of a barn, this VP admonished his supervisees to only use the Preferred/Value Preferred vendors by congratulating them on their subservience the previous year. Their compliance during 2010, in his words, “secured over $250,000 in Value Preferred vendor rebates! These cash rebates directly impact our bottom line.” He then extended “a special thanks…to [redacted]’s team. In 2010, her team had the greatest percentage of their overall spend go towards Preferred Agencies and Value Preferred Agencies — 89%! Nice work Immunology/Arthritis/(overactive bladder) team.”

Although this approach to managing a research-driven business is unsettling, some may question why it indicates an industry in decline and not just pharma during the current down cycle. Their answer may lie in looking to historical precedent. For the most part it, this supports the claim that clueless industries turn to finance management. A recent example comes from the US auto industry, a sector that effectively extended its down cycle for almost 40 years before crawling into bankruptcy.

Consider the recollections of Bob Lutz, an executive who spent 47 years in various auto industry positions, including the presidency of Chrysler and the vice-chairmanship of General Motors. In an excerpt from his memoir, “Car Guys vs. Bean Counters,” Lutz describes a growing obsolescence that overtook the US auto industry by the 1970s. Detroit’s physical plant was older than those of the Japanese, its legacy costs for health care and an older workforce were higher, and the Big Three remained unable to break their dependence on large gas-guzzlers.

“Faced with this environment,” Lutz writes, “General Motors embarked on a series of initiatives to overcome both the perception and reality of the growing import threat.” The common factor in these various palliatives was the decline of what Lutz calls the ‘product guys’ and the ascendancy of finance people.

The finance-dominated culture that came to rule Detroit actually held little regard for cars or customers. Both were seen as merely the incidental means of obtaining financial processes that provided the purpose and satisfaction of the business. According to Lutz:

(The finance culture created a) generalized consensus that we were, after all, primarily in the business of making money, and cars were merely a transitory form of money: put a certain quantity in at the front end, transform it into vehicles, and sell them for more money at the other end. The company cared about “the other two ends” - minimizing cost and maximizing revenue- but assumed that customer desire for the product was a given.

It remains too early to speculate on whether pharma at some point will also require a government bailout. The fact that industry operations presently remain under the thumb of its own finance management, however, brings to mind some dialogue from an Ernest Hemingway story, where one character asked another how a third character went broke.

“Two ways,” came the answer, “first gradually and then all of a sudden.”

 

[Anonymous]

I guess "diversity" as in older tenured employees doesn't fit Merck's definition of the concept Merck once proudly claimed to embrace and support.

 

[Anonymous]

I guess "diversity" as in older tenured employees doesn't fit Merck's definition of the concept Merck once proudly claimed to embrace and support.

Narrow minded bean counters that lack creativity or understanding of sales patterns are not the answer either. They are making it worse.

 

[Anonymous]

With our current leadership it is only a matter of time before Merck burns itself out. Too many new ideas and change done just to check the box instead of being productive.

You mean like "shortening the sales cycle"? What a cute little phrase leadership made up to mean put huge amounts of pressure on the customer to order more tablets or vaccines. MVID leadership has been pushing that mantra ad nauseum.

When the vaccine reps get their customers to order more doses one year, they get harassed the first half of the next year that doses are down. Why? Customers are being pushed to order more doses but they are not necessarily seeing more patients. As a result, customers are sitting on lots of product, not needing to order for a while. When reps explain that to leadership, they get upset and blame reps for not helping customers identifiy more apppropriate patients to vaccinate.

Yeah leadership, doctors are never looking for more patients and it's the reps fault for not being an arm of the doctors' marketing department to expand the patient population. You have to sometimes laugh at the absurdity of the situation. There are managers and directors in MVID who have never sold a vaccine and have only sold tablets for a couple of years going to dictate the best strategies to sell vaccines. It's the equivalent of giving somebody who has some experience being a hall monitor to teach police officers how to work their territory. We are in trouble.

 

[Anonymous]

Lawyers and bean counters run this company and will run it into the ground.

 

[Anonymous]

You mean like "shortening the sales cycle"? What a cute little phrase leadership made up to mean put huge amounts of pressure on the customer to order more tablets or vaccines. MVID leadership has been pushing that mantra ad nauseum.

When the vaccine reps get their customers to order more doses one year, they get harassed the first half of the next year that doses are down. Why? Customers are being pushed to order more doses but they are not necessarily seeing more patients. As a result, customers are sitting on lots of product, not needing to order for a while. When reps explain that to leadership, they get upset and blame reps for not helping customers identifiy more apppropriate patients to vaccinate.

Yeah leadership, doctors are never looking for more patients and it's the reps fault for not being an arm of the doctors' marketing department to expand the patient population. You have to sometimes laugh at the absurdity of the situation. There are managers and directors in MVID who have never sold a vaccine and have only sold tablets for a couple of years going to dictate the best strategies to sell vaccines. It's the equivalent of giving somebody who has some experience being a hall monitor to teach police officers how to work their territory. We are in trouble.

We are using the same strategy the auto industry adopted in the 70's and look where that got them. These fools are in it for the short term with little regard for anuthing but their personal gain.

 

[Anonymous]

This article describes DS, hospital manager covering KC, St Louis, Chicago, to a "T". I don't understand why the company pays to have this nut job fly every week to conduct field visits with reps. Merck is spending tens of thousands of dollars per year in airfare, rental cars, hotels and even limo rides to have him bring his "value" to his reps and their customers?
WTF?

 

[Anonymous]

Ufortunately these fruitloops also posses egos that ignore their failures.

 

[Anonymous]

http://www.bloomberg.com/news/2012-...treet-asylum-commentary-by-william-cohan.html

This article supports what many of us already know.

 

[Anonymous]

Merck is so heavy with these type of people.

 

[Anonymous]

Every dumbass executive from Frazier on down needs to read this post and then read it again until it sinks in to their understanding of what is so fundamentally wrong at Merck now. Any executive who fails to understand the truths represented in this post should be replaced since that makes them a part of the problem. Merck will continue to fail at becoming a leading pharma researcher and manufacturer again as long as all of this management instigated and supported hostility toward the non-management employees exists. Merck would be well served to remember, re-learn, and re-introduce those traits and practices that helped make them a most-admired corporation twenty years ago.

Unrelenting pressure and PIP scare tactics by management on the salesforce just leads to reps making bad and sometimes unethical choices that ends up hurting the company. We still have not learned our lesson from VIOXX and that truly was a costly lesson with Merck leadership guiding that preventable train wreck.

 

[Anonymous]

You mean like "shortening the sales cycle"? What a cute little phrase leadership made up to mean put huge amounts of pressure on the customer to order more tablets or vaccines. MVID leadership has been pushing that mantra ad nauseum.

When the vaccine reps get their customers to order more doses one year, they get harassed the first half of the next year that doses are down. Why? Customers are being pushed to order more doses but they are not necessarily seeing more patients. As a result, customers are sitting on lots of product, not needing to order for a while. When reps explain that to leadership, they get upset and blame reps for not helping customers identifiy more apppropriate patients to vaccinate.

Yeah leadership, doctors are never looking for more patients and it's the reps fault for not being an arm of the doctors' marketing department to expand the patient population. You have to sometimes laugh at the absurdity of the situation. There are managers and directors in MVID who have never sold a vaccine and have only sold tablets for a couple of years going to dictate the best strategies to sell vaccines. It's the equivalent of giving somebody who has some experience being a hall monitor to teach police officers how to work their territory. We are in trouble.

Another point of this continual "stock up model" is that doctors have to see many more patients to receive the same income because insurance payments got reduced. Throw in a doubting parent of a child, or a patient who does not want to be vaccinated and the physician cannot afford the time to explain the benefits and fight so "next patient". In MVD, things were understood that in MVID has many at the top wondering where they went wrong. Where they went wrong was coming over here and forcing out many talented and knowledgeable vaccine people and then trying to sell a product they did not understand or appreciate just as they tried to sell tablets. It is not working and the few of us left just shake our heads in amazement.

 

[Anonymous]

Place the blame where it truly belongs...Margie McGlynn...Blue-blooed spoiled brat, daughter or DInLaw of someone om Merck Board of Directors. I personally record the following quote I heard from her in early 2005..."The Merck vaccine franchise will be generating 13 billion dollars by 2013...The current MVD leadership cannot be counted on to pull through that revenue"... This comment coincided with the Primary care invasion of MVID. McGlynn, Thomas, Vignau, Lyons, Erlich, and so on.

McGlynn had a rabbi from old Merck leadership...you know, the Jersey Shore entitled crowd. She made sure that all who brown-nosed her got a seat at the vaccine table...and we all know the result. 70% of cafe pharma is directed at the MVD debacle...place the blame where blame is due. Sitting somewhere at the Jersey shore enjoying her retirement.