Fin561

In: Business and Management

Submitted By twhyte
Words 443
Pages 2
Tyreece Whyte
Fin 561
July 28, 2013
You Decide
Case 5.1 Merck Acquisition of medco
The merger between Merck and Medco will create a competitive advantage that will allow for long term survival and increase its competitive position by aligning with a PBM. In reaction to the merger between Merck company and Medco Smithkline Beecham and Roche Holding Limited announced their plans to acquire United healthcare and Syntex Corporation health systems in anticipation of the merger. By acquiring Medco, Merck will be a pioneer in the pharmaceutical and drug industry. Medco computer profile of 33 million customers that amounts to 26% of all people covered by pharmaceutical benefit plans, 100 fortune 500 companies, federal and state benefit plans and 58 blue cross/blue shield groups and insurance companies will give Merck an opportunity to identify prescriptions that could be switched from a competitor. Which will increase sales, identify patients who did not refill their prescriptions and provide proof that Merck drugs are worth the premium. The combination of medical records and who takes what pill will allow Merck to establish the supremacy of their products. Other benefits include a $1 billion annuals savings in marketing operations and a more precise marketing strategy. The marketing strategy will allow Merck to reduce sales force and focus on a marketing plan to managers instead of doctors. Some reasons for the merger are experts predict that managed care providers will rely on a single drug company to deliver all of its pharmaceutical products and services and the responsibility for payment is linked to provisions of health care services rather than traditional insurance plans. By shifting from doctors to managed care and PBM administrators, marketing strategies focus on a few formulary and plan managers as well as favor firms with manufacturing,…...

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