Merck's New Product Development and Launch Strategy for Januvia

Though Merck had some blockbuster drugs in different therapeutic segments, it had left the diabetes drug market largely untapped. This market was enormous, presenting Merck with a huge opportunity. As of 2006, 230 million people in the world suffered from diabetes, and this figure was expected to cross 350 million by 2025. In the US, 7 percent (about 21 million people) of the population suffered from diabetes, of which 90-95 percent suffered from Type 2 diabetes. It was reported that almost half of the people suffering from the disease did not achieve adequate control of their blood sugar levels (Refer to Exhibit IV for key figures for Type 2 diabetes in the top seven pharmaceutical markets)...

Wall Street analysts felt that both Januvia and Galvus would go on to become blockbusters with sales as high as US$ 2 billion annually. They expected both the brands to command a premium price. The first to reach the market with this new class of drug would have a bigger advantage, they said. On October 16, 2006, FDA approved Januvia for the treatment of Type 2 diabetes when diet and exercise is not enough. Pharmaceutical industry analyst for Decision Resources, Donny Wong said, "The whole industry thought Merck was six months behind Novartis. It came as a surprise that Merck was able to pull ahead."...