Merck Novartis
Merck and Novartis Financial Statements 2012

Balance Sheet

• hat components of stockholders' equity do each of the companies disclose?

Merck & Co. provides a consolidated statement of stockholders equity on their balance sheet. They disclose the number of shares, share types, retained earnings, and some historical data (Merck & Co., 2013).

Novartis provides a much more thorough and detailed report of their shareholders equity in their annual report. Not only do they report all of the same accounts as Merck, but they also provide a detailed analysis of the movements in shareholders' equity as well as many of the motivations that are responsible for changes (Novartis, 2013)

• Do the companies have preferred stock shares outstanding? If so, what special features do these shares contain?

Both companies have preferred stock. Preferred stock accounts are paid before the common stock accounts. They are given priority when there is a decision to be made about who…...

mla

Works Cited

Merck & Co. (2013). 2012 Annual Statement. Retrieved from Merck & Co.: http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTc0MTg1fENoaWxkSUQ9LTF8VHlwZT0z&t=1

Novartis. (2013). 2012 Annual Report. Retrieved from Novartis:  http://www.novartis.com/downloads/investors/reports/novartis-annual-report-2012-en.pdf

Corporations have many stakeholders, of which the shareholders are just one group. There are also, for example, creditors, employees, suppliers and customers. In the case of pharmaceutical giants, society at large is also a stakeholder of a sort. The products a company like Merck develops improve the health and well-being of the population at large. Government can be said to be the stakeholder that represents this interest.

In the case of Mectizan, this may have been a significant factor in the decision to proceed with development. The development and free distribution of the drug generates goodwill on the part of Merck. That goodwill is an intangible asset. Merck relies on governments for a favorable legislative and structural environment in which to operate. It may be the case that the goodwill generated by the occasional apparent act of altruism allows for the perpetuation of that favorable environment. Therefore, even though the hard…...

mla

Reference for Business. Retrieved May 10, 2008 at  http://www.referenceforbusiness.com/encyclopedia/Sel-Str/Stakeholder-Theory.html 

Rodgers, T.J. (2005). Rethinking the SOcial Responsibility of Business. Reason. Retrieved May 10, 2008 at  http://www.reason.com/news/show/32239.html

Merck's Medco
The acquisition of Medco (by Merck) is a sign of shifts that are taking place in the health care industry. What is happening is there has been an emphasis on providing total health care solutions to consumers. As they are demanding that they have access to: the best services and want to have their different needs combined into one plan. This has lead to changes in the way health care services are delivered. As a variety of managed care plans have emerged to address these issues. Simply put, this is a health organization that will have their members pay them fees for the various services they require. As, this organization will negotiate with health care providers and drug manufactures; to offer their members the most cost effective solutions for addressing these different issues. Part of the reason for this, is because health care costs have been increasing dramatically and…...

mla

Bibliography

Merck and Company. The Pharma Letter, 1993. Web. 18 Mar. 2011

Merck Medco Managed Care. The Pharma Letter, n.d. Web. 18 Mar. 2011

It is different than a criminal action, which involves a breach of duty owed to society at large. It is possible that actions are both tors and crimes; but only the state may prosecute a crime, but any injured party may bring a lawsuit against another as a tort ruling. There are a number of different torts; ranging from assault to negligence, all with foundations in the common law tradition (Van Gerven, 2001).
One business tort example is called Ultrahazordous Activity. This tort asserts that there is something so inherently dangerous that a person engaged in that activity can be held liable for any injuries caused to anyone else; even if the person or organization took every reasonable precaution to prevent injury. For instance, a hypothetical company called Xenon might be transporting explosive materials from California to a job site in Colorado via railroad. They have taken precautions, but during…...

mla

REFERENCES

Financials - Merck. (2010, January). Retrieved February 2011, from 2009 Annual Report: http://www.merck.com/investors/financials/home.html#

Horton, R. (1995-96, January). Vioxx, the Implowion of Merck, and Sftershocks at the FDA. Retrieved February 2011, from the Lancet:  http://image.thelancet.com/extras/04cmt396web.pdf 

McClellan, F. (1994). Medical Malpractice: Law, tactics and ethics. Philadelphia, PA: Temple University Press.

Reuters. (2006, December 7). Merck Sees Slightly Higher 2007 Earnings. Retrieved February 2011, from the New York Times:  http://www.nytimes.com/2006/12/07/business/07drug.html?ex=1323147600&en=19d27b5814f1c1e8&ei=5088&partner=rssnyt&emc=rss

More than anything else, this case exemplifies a keen sense of legal risk management. The company made enormous profits from the drug while it was selling it; it was highly effective for its on-label purpose and had no known dangerous side effects. After finding that they could be responsible for causing heart problems in patients taking the drug, the company pulled it for ethical reasons and as a means of protecting the company form legal and financial liability -- ongoing cases would have made the drug unprofitable, even with proper warnings (or so it seemed). Then, rather than pursuing cases that it was clearly winning, Merck spent less than one year's profits to settle all pending cases, coming out very much on top financially and in the clear legally. The fact that competitors still offer similar drugs suggests that Merck might actually have been to conservative in its response to…...

Merck and Vioxx -- Research Data
How did Merck misuse research data to support their decision for marketing the COX-2 Drug Vioxx?

In November of 1998 the pharmaceutical company Merck submitted Vioxx's application to the Food and Drug Administration seeking approval for the COX-2 inhibitor drug, as a treatment for osteoarthritis, on the basis of clinical trials involving 5,400 patients. Merck said the rates of cardiovascular risk were "similar" among patients taking Vioxx, placebo or other pain relievers. This, however, was not the case. In fact, Vioxx had a higher risk of cardiovascular problems among patients taking Vioxx vs. patients taking the pain reliever naproxen. (Steyer, 2004)

Merck excused this by stating that the pain killers Vioxx was being compared to such as naproxen, the generic form of Advil or Motrin, had additional heart protective effects, although they were less effective in preventing pain. But according to CNN Money, the all Street Journal…...

mla

Works Cited

"Merck's Vioxx emails scrutinized." (1 Nov 2004) CNN.com. CNN Money. Retrieved 22 Jun 2005 at  http://money.cnn.com/2004/11/01/news/fortune500/merck/ 

Steyer, Robert. (18 Nov 2004) "The Murky history of Merck's Vioxx." The Street. Retrieved 22 Jun 2005 at   cm_cat=FREE& cm_ite=NAhttp://www.thestreet.com/_googlen/stocks/biotech/10195104.html?cm_ven=GOOGLEN& ;

Merck Blindness
Merck & iver Blindness: A Case Study Analysis

It has become increasingly common for large-scale international firms to dedicate some of their resources to the interests of Corporate Citizenship. This usually entails the use of the companies skills, resources and personnel to effect a positive change for a determined population. In this case of our present study, the highly reputable pharmaceutical company Merck is reported to have dedicated its resources to eradicating the condition colloquially known as river-blindness in Sub-Saharan Africa. According to the case study by Levine (2005), since 1987 Merck and the World Health Organization have been partners in freely distributing the drug Mectizan to impoverished African populations in the hope of eliminating 'onchocerciasis.'

Slide 2: Action Plan

Because of the inherent challenges of creating and maintaining a Western distribution team of physicians and other trained public health specialists, an Action Plan would emerge that would dispatch ordinary African citizens…...

mla

References

Levine, J.B. (2005). Sharing Power: How Merck and the WHO have sustained a fragile balance of power in their battle against river blindness. Stanford Social Innovation Review.

An ethical question has to be raised as to Merk's direct role in both the research study and the resulting NEJM article. When the drug manufacturer is involved in a study regarding their leading products future, there is a blatant conflict of interest.
The actual marketing of Vioxx does not seem to pose any ethical questions. It was marketed as a drug that would assist with arthritis and other pain treatment. This is true and therefore was highly recommended by physicians. Further, when the initial concerns regarding the cardiovascular issues started to rise, Merck followed FDA regulations and used a warning label.

The evidence pertaining to the unknown emails and memos, however, are indicative of the fact that Merck's executives knew, yet failed to adequately disclose to doctors and patients, information on Vioxx's safety. This case for lack of full-disclosure is even more of an issue when coupled with the Merck…...

Financial Accounting
For Merck, the company is based in the U.S. And uses the U.S. generally accepted accounting principles (GAAP) to compile its financial statements.

Novartis is based in Switzerland, and it uses international financial reporting standards (IFS) to prepare its financial statements. It is allowed to use this as foreign firm, even though it has a cross-listing on the New York Stock Exchange, but it files a different form, the 20-C, to recognize that is a foreign entity with foreign accounting practices.

The external auditors for Merck are Price Waterhouse Coopers. They certify that they have followed the standards set by the Public Companies Accounting Oversight Board. They also followed the internal control integrated framework of COSO. The auditor for Novartis is also Price Waterhouse Coopers. They used the criteria of the internal control integrative framework from COSO and the standards of the Public Companies Accounting Oversight Board.

It is interesting to see…...

mla

References

Merck Form 10-K. 2012 Retrieved November 25, 2013 from http://www.merck.com/investors/financial-reports/quarterly-financials.html

Novartis Form 20-F. 2012. Retrieved November 25, 2013 from  http://www.novartis.com/downloads/newsroom/corporate-publications/Novartis-20-F-2012.pdf

Ethical Analysis of Merck and Vioxx
How could Merck management have handled the research, development and marketing of Vioxx in a more ethically responsible fashion, if at all?

On September 30, 2004, Merck & Company declared the drawback associated with Vioxx, its extremely profitable pain reducer for osteoarthritis victims, from the marketplace. This particular move came only 7 days after scientists within the company discovered in a medical trial that subjects who utilized Vioxx regularly over a period of 18 months were prone to a cardiac arrest. Merck chairman as well as CEO aymond V. Gilmartin explained the decision to remove their most profitable product as "the sensible move to make." He was quoted saying, "It's included in our corporate foundations to work in this manner. That's the reason why the management arrived at this particular decision." Within the legal cases that succeeded, nevertheless, harming documents surfaced spreading question on Merck's claim…...

mla

References

Boatright. (2012). Ethics in the World of Business. Always Learning, Pearson.

Carveth, R., Ferraris, C. And Backus, N. (2006). Applying the Potter Box to Merck's Actions Regarding the Painkiller Vioxx. Association for Business Communication Annual Convention. Association for Business Communication.

Biddle, J. (2007). Lessons from the Vioxx Debacle: What the Privatization of Science Can Teach Us About Social Epistemology. Social Epistemology, Vol. 21, No. 1, pp. 21 -- 39.

Bombardier, C., L. Laine, A. Reicin, D. Shapiro, R. Burgos-Vargas, B. Davis, et al. (2000). Comparison of upper gastrointestinal toxicity of Rofecoxib and Naproxen in patients with rheumatoid arthritis. New England Journal of Medicine 343: 1520 -- 28.

In what has been billed as the largest prescription-drug withdrawal in history, on the 30th of September, 2014, Merck withdrew Rofecoxib (Vioxx) following what Topol (2004) cites as excessive stroke and myocardial infarctions risk associated with the drug. The withdrawal came in the light of an FDA approval five years earlier and $2.5 billion in sales. At the time of its withdrawal, the medicine had been taken by a total of 80 million patients. Topol (2004) is of the opinion that this particular debacle could have been avoided had clear warning signs not been ignored along the way. The primary leaders in this particular case were leadership at the FDA and Merck’s senior executives. The entre fiasco is representative of a colossal failure of leadership. Rodger Stodgill (as cited in Northouse, 2016) points out that some of the key traits of leadership include “persistence, insight, initiative, self-confidence, responsibility, cooperativeness, tolerance, influence…...

38 per share on the company's common stock for the first quarter of 2005. The dividend is payable January 3, 2005 to stockholders of records at the close of business on December 3, 2004. Growth in the ZETIA and VYTORIN franchises are expected to continue. T
There are currently several candidates in Phase III that Merck plans to file in 2005 as well as Type 2 diabetes treatment and three vaccines. The fourth-quarter 2004 EPS anticipation is stated to be $0.48 to $0.53, which includes the impact of approximately "$700 to $750 million foregone sales of VIOXX. The result is anticipation by Merck for EPS guidance (2004 full-year) of $2.59 to $2.64. These amounts include withdrawal impact and next years negative affects of the DPS by $0.50 to $0.55."

Merck & Co., Inc. announced in a recent report that they had made submission to the U.S. Food and Drug Administration (FDA) PROQUAD,…...

mla

Bibliography:

"Merck Board Appoints Special Committee to Review VIOXX Withdrawal" 2004 Dec 2 Whitehouse Stations, N.J. [Online] available at: room/press_releases/corporate/2004_1207.htmlhttp://www.merck.com/news

The global pharmaceutical market in 2000 - North America sets the pace (nd) [Online] available at: / news_ story _010 314.htmhttp://www.ims-global.com/insight/news_story/0103

Merck Announces Voluntary Worldwide Withdrawal of Vioxx 2004 Sep 30 [Online] available at:  http://www.vioxx.com/rofecoxib/vioxx/hcp/hcp_notification_physicians.jsp 

Paraphrased

25 in 1999, $0.24 in 2000 and $0.23 in 2001. This earning is after deducting cost of sales and operating expenses.
The following were the cash flows from 3 activities of Merck and ICN (figures were in dollars):

Cash inflow (outflow)

Merck & Co., Inc.

ICN Pharmaceutical Inc.

From operating activities

6.1B

7. 7B

9.1B

87.1M

From Investing activities

2.8B)

3.6B)

4.3B)

50.36M)

90.08M

119M)

From Financing activities

3.9B)

3.4B)

5.1B)

36.4M

Operating cash flow is the cash that the Company generates through running its business. Considering cash flows of both Companies were positive, it can mean that their working capital is more than adequate to meet the operating requirements of the Company.

Cash flow from investing activities were aggregate change in a company's cash position resulting from any gains (or losses) from investments in the financial markets and operating subsidiaries, and changes resulting from amounts spent on investments in capital assets such as plant and equipment. Merck's outflow was mainly due to environmental facilities while ICN on research and development and distribution…...

Q1.Why has the attractiveness of the pharmaceutical industry declined so much since the 1980’s? What are the implications of those changes in industry structure for firm strategy? Despite the tremendous profits garnered by large pharmaceutical companies for so-called blockbuster drugs, pharmaceutical companies must make huge investments in R&D to produce profitable medications. The vast majority of drugs which are developed and tested never go to market. Additionally, once companies produce valuable drugs, they have a limited window on which to capitalize upon a drug’s profitability before its compounds can be sold in the form of a much cheaper generic. The FDA shortened the patient life of drugs from 11-12 years from 17-20, thus vastly reducing the financial ability of companies to cash in on valuable non-generics (Collis & Smith, 2007, p.5).
The industry structure also changed significantly, as more and more companies began to enter into the fray of developing new drugs.…...

Meanwhile, units of production method is computed using the on units of use rather than time. For example, particular machinery is depreciated based on the estimated number of units the Company expected to produce. Both method are more complex compared to straight-line method of depreciation.
Considering that cost of an item will not have the same value compared at acquisition, an accounting method is created to realize an asset's valuation during the period. For property, plant and equipment, as well as goodwill and other intangible assets, the method used to bring down the asset's cost to its realizable value is through deprecation. Depreciation is a process of allocating its cost, excluding salvage value, over its useful life not exceeding the Company's estimated business life. Salvage value can be defined as the worth of an asset upon its maximum useful life of an asset.

As of December 31, 2001 and 2000, the…...