Merck's New Product Development and Launch Strategy for Januvia

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Case Details:

Case Code : MKTG176
Case Length : 19 Pages
Period : 1999-2007
Pub Date : 2007
Teaching Note :Not Available
Organization : Merck & Co., Inc.
Industry : Pharmaceutical
Countries : Europe, USA.

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"The patient need is so great. That unmet need is driving us to move faster than in the past." ¹

- Amy Rose, Spokesperson, Merck & Co., Inc., in 2006.

"In situations where physicians are making a brand choice, it's clear that Januvia is off to a strong start and Merck looks to be putting the promotional muscle behind it to make that happen."²

- Patrick Angelastro, Senior Vice President of Strategic Development, ImpactRx³, in November 2006.

"[...] the drug [Januvia] also provides an ideal case study of why doing everything right in primary care brings with it extraordinary risks: the key elements of Januvia's success - blazing speed through development and the extraordinary safety profile on which its commercial triumph depends - also define its most dangerous commercial liabilities."⁴

- Roger Longman, a Managing Partner at Windhover Information Inc.⁵, in March 2007.

It's All About Speed

On April 12, 2007, one of the world's leading pharmaceutical companies, Merck & Co., Inc. (Merck) announced that its profits for the first quarter of 2007 were 34 percent higher than previous forecasts.

The top line growth was driven by healthy demand for its newest drugs including Januvia (Sitagliptin phosphate).⁶

Merck announced that Januvia had achieved US$87 billion in global sales in the first quarter of 2007.⁷ The sales results followed the strong launch of the first-in-the-class drug for the treatment of Type 2 diabetes⁸.

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Another significant element was the speed with which Januvia reached the market - if Merck had followed the traditional new drug development timeline, the drug would not have arrived in the market before 2010.⁹

Januvia was approved by the US Food and Drug Administration¹⁰ (FDA) in October 16, 2006 - just seven years after Merck had started working on this new class of drugs - Dipeptidyl peptidase-4¹¹ (DPP-4) inhibitors. Its research effort soon overtook Novartis International AG¹² (Novartis), which had been working on a similar project since 1995.

Januvia did this by conducting some phases of the new drug development cycle in parallel rather than sequentially. Marketing experts appreciated the speed with which Merck launched the drug, once the brand was approved.

Merck's New Product Development and Launch Strategy for Januvia - Next Page>>

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1] Beth Herskovits, "Januvia's Hasty Arrival," www.pharmexec.com, January 3, 2007.

2] Bill Berkrot, "Data Shows Strong Launch of New Merck Diabetes Drug," www.topix.net, November 21, 2006.

3] ImpactRx, headquartered in New Jersey, USA, is an agency that measures the direct impact of pharmaceutical promotion on high-prescribing physicians in the US.

4] Roger Longman, "Januvia: Defining Primary-Care Success and Risk," www.sis.windhover.com, March 2007.

5] Windhover Information Inc., headquartered in Connecticut, USA, provides analysis and data on pharmaceutical and biotech device and diagnostic company strategy and trends.

6] Kimberly DuBord, "Good Earnings Prescription for Merck," www.breifing.com, April 19, 2007.

7] Susan Todd, "Merck Wins Race to Market," www.nj.com, April 30, 2007.

8] Type 2 diabetes is a condition in which the body has elevated blood sugar or glucose. The reasons for this could be that the body may not make enough insulin, the insulin that the body produces may not work as well as it should, and/or the liver may release too much glucose.

9] "Remarks of Richard T. Clark, Chief Executive Officer and President, Merck & Co., Inc. at the
Annual Business Briefing Whitehouse Station, New Jersey," www.merck.com, December 12, 2006.

10] US Food and Drug Administration is a branch of the US federal government that approves new drugs for sale in the US.

11] Dipeptidyl peptidase-4 (DPP-4) is an enzyme in our body that plays a major role in glucose metabolism.

12] Novartis International AG, headquartered at Basel, Switzerland, is one of the world's leading pharmaceutical companies.


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