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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It's All About Speed Contd...

This rush to market was prompted by the fact that Novartis' drug Galvus was expected to be approved by the FDA only a few weeks after Januvia's approval. The results were spectacular. A comparison of the number of prescriptions of Januvia after one month of its launch was similar to the other leading brands in this highly competitive segment. Beth Herskovits, News and online editor, Pharmaceutical Executive,¹³ noted, "Januvia's dramatic launch was all about speed." ¹⁴

As of April 2007, Merck was still reaping the benefits of its rapid launch - Galvus had not yet been approved by the FDA on account of some safety concerns.

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Thus Januvia was the only player in the estimated US$4 billion market for DPP-4 inhibitors and well on its way to becoming a blockbuster drug¹⁵. Merck also extended its lead over Galvus by getting another brand Janumet (a combination of Sitagliptin and a commonly used generic drug¹⁶ Metforin) approved for the treatment of Type 2 diabetes.

In addition to extending its lead over Galvus, Janumet would help Merck target a bigger portion of the estimated US$ 17 billion diabetes market, experts said.¹⁷

Analysts noted that a big success like Januvia was just what the doctor had ordered for Merck. Merck had been reeling under the impact of thousands of lawsuits related to the 2004 recall of its pain relief drug Vioxx, and it also had to overcome the impact of the patent expiry of its blockbuster cholesterol lowering drug Zocor in 2006, and the impending patent expiry of three other blockbuster drugs from its stable through 2012...

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13] Pharmaceutical Executive is a magazine that provides news and features from the world of pharmaceutical business.

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

15] Blockbuster drugs are those drugs that had global sales of US$1 billion or more.

16] Generic drugs (or Generics) are either copies or the basic form of a proprietary drug (or "brand-named") drugs produced by large multinational. For example, Zocor is the brand name owned and patented by Merck. It contains the molecule Simvastatin. Any other drugs with the same composition made by other companies are called generics.

17] Shannon Pettypiece, "Merck's Janumet, Pill for Diabetes, Approved by U.S. (Update2)," www.bloomberg.com, April 1, 2007.


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