Germany’s Merck eyes consumer products exit | September 11, 2017 Issue - Vol. 95 Issue 36 | Chemical & Engineering News
Volume 95 Issue 36 | p. 11 | News of The Week
Issue Date: September 11, 2017 | Web Date: September 6, 2017

Germany’s Merck eyes consumer products exit

Plan to sell business continues pharmaceutical industry’s love-hate relationship with OTC drugs
Department: Business
Keywords: Pharmaceuticals, OTC, over-the, counter, Merck

Today’s pharmaceutical companies have a love-hate relationship with the over-the-counter drug business. OTC drugs are steady sellers that don’t require a lot of risky R&D. But they don’t bring high profits either.

Germany’s Merck KGaA has decided it isn’t fond of the OTC business and is exploring options to leave the field. The firm says it doesn’t have the scale to compete in OTC drugs and that they don’t fit anymore with its focus on science and technology.

Merck’s OTC business, which it calls consumer health, had sales last year of about $1 billion. It markets products such as Bion vitamins and Seven Seas cod liver oil.

Some drug companies have embraced the OTC business as a calm hedge against the stormy ups and downs of discovering new, patented drugs. Johnson & Johnson, for example, has long run an OTC business with well-known brands such as Tylenol and Benadryl.

Sanofi paid almost $2 billion in 2010 to acquire the U.S. OTC drug maker Chattem; last year it took over Boehringer Ingelheim’s OTC unit. In 2014, GlaxoSmithKline and Novartis announced that they would combine their consumer health businesses into a joint venture with about $11 billion in annual sales. Also that year Bayer acquired Merck & Co.’s OTC drug business for $14 billion.

In addition to these firms, a possible acquirer of the Merck business is Reckitt Benckiser, which has acquired OTC lines from Bristol-Myers Squibb and others in recent years. In 2014 Reckitt acknowledged aborted talks to acquire Merck & Co.’s OTC drug business.

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