Merck’s research Essays

Merck’s research Essays Merck’s research Essay Merck’s research Essay Merck’s research and development of its Crixivan is considered a breakthrough in the treatment of HIV positive patients. Merck and Co. Inc. although behind by quite a significant time frame with Abbot and Roche in terms of marketing its product, has been well applauded for having been able to develop a proven more efficient counterpart. The product’s unexpected fast FDA approval should have been of great benefit to Merck since it can already make Crixivan available in the market far earlier than they have expected. However the early approval of the product for market distribution posed a huge problem to the company because of the fact that they actually did run out of time in preparing the additional manufacturing plant needed to produce the product. The situation therefore is that since the product has been published as a breakthrough in the market of HIV treatment drugs, the public had expected its availability in the market the soonest possibl e. In short, there has been the demand that Merck cannot possibly supply since it lacked enough manufacturing facilities enough to satisfy such demand.Merck actually has the edge in some aspects. First, Crixivan has been proven, as had been approved by FDA, to be more effective in treating HIV patients over its competitors Abbot (Invirase) and Roche (Norvir) indicating a 44% efficiency in its clinical trials (p.81). Moreover its 86% efficiency rate in combination with AZT and 3TC is undoubtedly an edge besides the fact that it was proven more potent than Invirase and with lesser side effects compared to Norvir (p.82). Second is that its pricing strategy is far cheaper than the competitors. As described, Crixivan is 24% cheaper than Invirase and 33% less than Norvir (p.85). Third is that Crixivan has an assured market since HIV patients in 1996 already rose to 3.1 million aside from the potential users-those 22.6 million people HIV patients are living with and a considerably high rat e of children who are also HIV positive (p.82).What was just being sad about it is that Merck was not able to draft a sound forecast of its manufacturing facilities and the time required to prepare them. Sound forecast should not only include the possible demand for the product but should also include the sound logistics skills in forecasting whether such demand could possibly be supplied with the available stocks. For Merck, it has the demand but unfortunately, it does not have the supply enough to satisfy it. What went wrong was the tight time frame provided or budgeted by Merck in producing Crixivan. Initially this aspect could be justified since the product was approved six months earlier than expected which means that they really would be expected to be behind about the same time span. Besides, Merck had already taken the risk of expanding its manufacturing plant to accommodate the production of Crixivan two months before the Phase III approval of its clinical trial (p.81).An o bjective analysis of Merck’s efforts to produce Crixivan would lead one to conclude that it has done its part on matters of product quality. Primarily Merck chose to produce the product on its own manufacturing plant and discarded the idea of outsourcing. It actually did a sound decision on that part since it already had previous bad experience of product quality in its previously outsourced products. Another thing is that it did not take rush procedures in the manufacturing or Crixivan but instead carefully stick to the standard 15 steps procedure.I can see that the problem therefore is on its inability to make additional investments in human resources and materials in order to finish the expansion of the manufacturing plant as soon as possible. At least there was not mention of this facts in the cases mentioned. If it cannot rush steps on producing the Crixivan, it can rush on finishing the plant itself. Should it take Merck to invest a considerable amount for it, it should have taken the risk since it had already established market and in fact has demands coming in that it cannot already satisfy.Outsourcing can still be an option though. I believe that it is possible to make arrangements with the outsourced agent to make the product using their facilities but the supervision of the whole process would be done by Merck. This way, although more expensive on human resources to supervise the process in another plant, it could have been a great help for Merck in the sense that this can bridge the shortage in demand while its own manufacturing plant is still on construction.Relative to Merck’s humanitarian mission, I believe that Merck actually had been very considerate with its Support program and including the integration of the indigents in its services. It should have been actually rewarded by the government and those AIDS activists for its free counseling services for the uninsured patients and the free supply of Crixivan to the indigents and t he clinical trial participants. While it is true that pharmaceutical companies like Merck are gaining huge income compared with those in the other industries, I believe that Merck has done its social responsibilities well enough. Besides these services, Merck also ensured the public and FDA that it closely monitors the patients using the product as agreed to ensure that they would not be at risk of developing a resistant strain of HIV.In my opinion, Merck got short of choosing limited channels of distribution for Crixivan. While its purpose was to regulate the demand for the product and to ensure its proper application in the treatment process, it should have considered other channels besides Stadtlanders. One reason is that Stadtlanders has been charging too much, as the public sees it, on Crixivan. Even if this could be justified by the quality of services it provides with the clients, still Crixivan carries Merck’s name, not Stadtlanders.I believe that Merck has other opti ons besides Crixivan that could also offer almost the same quality of services. One option could have been a bidding of possible counterparts in order to lessen the cost of the services and the product itself. Thus Crixivan could be more affordable with more patients. Although legally, it has no control over the pricing of the product after being endorsed with distributors, Merck still has the choice of making exclusive agreement with its distributor as part of the pre-bidding agreement. Of course, those who would be willing to take Merck’s terms and conditions would bid. This would also provide Merck with the opportunity to lessen the cost of investment in human resources.One more thing Merck could have failed to use is the media. Since it is media that made Crixivan famous and in demand, it should have taken the opportunity to publish the necessary guidelines in administration of Crixivan so that the public would not be accusing them of neglect. Merck however justified this failure on grounds that FDA’s approval of the said literature was delayed. Still it would be helpful still to make bits of instructions even in print media to inform the public. It could have been an additional cost but it would be worthy of counteracting negative publicity on the Crixivan and Merck. Â  Such would have lessened its cost on human resources who are assigned to take care of the free services it offers via phone calls. Advertisements are one time investments while the salaries of the additional employees would continue until Merck would be finally through with its expansion project. Besides this, it has to pay for employee benefits.If am to handle the administrative aspect of the case, I would have to choose to limit the counseling services on uninsured patients. These services could already be transferred to the distribution channels like Stadtlanders or others that Merck have chosen. As had been mentioned earlier, the distribution process could have been done by bidding of service providers invited by Merck after consideration of their quality services offered. Besides it was mentioned in the case that Stadtlanders is having 37% mark-up on Crixivian with the justification of its counseling and monitoring services.Merck in general actually had done its social obligations by the services it provided with the general public. The low price of Crixivan, the integration of the indigents in the support program and the continuing monitoring services it provides are enough reasons for one to conclude that Merck lived on its mission statements. What went wrong was its failure to make accurate forecasts in the production of the product and its inability to consider other competent distribution channels. Merck also failed to make sound decisions on where to place its additional investment it was willing to make. To make this clear, Merck invested on human resources for monitoring and counseling services when this amount could have been more properl y appropriated in human resources in the construction of the plant expansion project. Its cost on human resources can also be strategically reduced if it had its counseling and monitoring services passed to distribution channels because the latter offer the same services.Merck has no control over the fast and unexpected approval of its product by the FDA but it can control other variables involved in marketing its product. I would insist that Merck should have taken into consideration the outsourcing idea with just an additional supervising team. This could have hastened its production and have lessened the damage it caused due to shortage of supply. There is great money waiting for Merck because of its advantage over its competitors. But the system in the healthcare industry has standards as with other industries. One’s failure to market the product in strategic channels would result to an edge by competitors regardless of price and quality. In the case of Merck, Crixivan an d its competitors are highly in demand because of the outbreak of AIDS. It was an opportunity Merck have seen but taken short of preparing for the right steps to get through the market.