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See the attached files. Please provide some assistance with the following paper for Merck's Acquisition of Medco. A page paper double-spaced has to be a written analysis, including tables of financial calculations. It has to include the Key Players which are explained in the attachments.
The attachments also include financial statement and instructions. The Grading Rubric is as follows: Understanding; Demonstrate a strong grasp of the problem at hand.
Demonstrate understanding of how the course concepts apply to the problem.
Analysis; Apply original thought to solving the business problem. Apply concepts from the course material correctly toward solving the business problem. Execution; Write your answer clearly and succinctly using strong organization and proper grammar. I'm adding a major part of the problem that I didn't.
This merger reflected fundamental changes taking place in the pharmaceutical industry. Managed care plans typically provide members with medical insurance and basic health care services, using volume and long-term contracts to negotiate discounts from health care providers.
In addition, managed care programs provide full coverage for prescription drugs more frequently than do traditional medical insurance plans. The responsibility for managing the provision of prescription drugs is often contracted out by the managed care organizations to PBMs.
The activities of PBMs typically include managing insurance claims, negotiating volume discounts with drug manufacturers, and encouraging the use of less expensive generic substitutes.
The management of prescription benefits is enhanced through the use of formularies and drug utilization reviews. Formularies are lists of drugs compiled by committees of pharmacists and physicians on behalf of a managed care organization.
Member physicians of the managed care organization are then strongly encouraged to prescribe from this list whenever possible. Drug utilization reviews consist of analyzing physician prescribing patterns and patient usage. They can identify when a patient may be getting the wrong amount or kind of medicine and when a member physician is not prescribing from a formulary.
Essentially, this amounts to an additional opportunity for managed care or PBM administrators to monitor costs and consolidate decision-making authority. The key aspect of the shift to managed care is that the responsibility for payment is linked more tightly to decision making about the provision of health care services than it is in traditional indemnity insurance plans.
The implications for drug manufacturers are far reaching. With prescription decision-making authority shifting away from doctors to managed care and PBM administrators, drug manufacturers' marketing strategies similarly will shift their focus from several hundred thousand doctors to a few thousand formulary and plan managers.
This, in turn, will result in a dramatic reduction in the sales forces of pharmaceutical manufacturers.
Several other significant changes in industry structure are expected to occur. Many industry experts predict that managed care providers will rely on a single drug company to deliver all of its pharmaceutical products and services rather than negotiating with several drug companies.
This will favor those firms with manufacturing, distribution, and prescription management capabilities. In addition, many experts believe that only a handful of pharmaceutical companies will exist on the international scene in a few years.
They point to intense competition, lower profits, and a decrease in the number of new drugs in the "research pipeline" as contributing factors. Merck executives identify Medco's extensive database as the key factor motivating the merger.
Numerous opportunities exist for Merck to utilize the information contained in Medco's database. First, the database will allow Merck to identify prescriptions that could be switched from a competitor's drug to a Merck drug.
Merck pharmacists will then suggest the switch to a patient's doctor. This prospect of increasing sales is enormous. Second, the database will allow Merck to identify patients who fail to refill prescriptions.
The failure to refill needed prescriptions amounts to hundreds of millions of dollars in lost sales each year. Finally, Merck will be able to use Medco's computerized patient record system as a real-life laboratory with the goal of proving that some Merck drugs are worth the premium price charged.Merck-Medco: Vertical Integration in the Pharmaceutical.
filled or processed approximately million prescriptions. M. Price controls imposed by the government would have the effect of making pharmaceuticals available to more consumers. the market now has the ability to value each entity as 'pure plays' in their respective industries.
Lilly/PCS and Merck/Medco enforcement actions alleged that through vertical integration there were competitive concerns of (1) foreclosure – that rival drug manufacturers might find access to the market limited, and (2) collusion – that the. In the midst of an M&A frenzy in the global pharmaceutical industry, Wharton experts advise companies to keep a watchful eye on post-merger integration.
An In-Depth Look at How Regulations Drive the Pharmaceutical Industry Agenda 1. Mergers & Acquisitions, Governance, and Industry Disruptors 2. R&D, Pipelines, and Patents. Search and browse our historical collection to find news, notices of births, marriages and deaths, sports, comics, and much more.
1 1. Introduction Vertical integration occupies a central role in organizational economics. Williamson () calls it the "paradigm" problem for explaining the distribution of firms and markets in.