Merck & Co

Merck pulls out of J&J consumer venture

pharmafile | September 29, 2011 | News story | Sales and Marketing J&J, JJ, Merc & Co, OTC 

Merck & Co has exited a joint venture with J&J, selling its stake in the J&J/Merck Consumer Pharmaceuticals business to its former partner for $175 million.

Merck and J&J created the business unit in 1989 to develop, manufacture, market and distribute certain over-the-counter (OTC) consumer products in North America.

But after 22 years Merck has now sold 50% of the business to J&J, in order to concentrate on the OTC business it gained through its 2009 merger with Schering Plough

Merck will receive a one-off payment of $175 million from J&J and retain rights to the Pepcid heartburn brand outside the US and Canada.

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Merck will also gain greater freedom to operate in the OTC consumer sector, allowing the firm to make the most of products it switches from prescription-only to OTC status, as well as to actively pursue OTC licensing activities in the highly lucrative US market.

J&J will own the venture’s assets that include the exclusive rights to market Pepcid, indigestion drug Mylanta and other local OTC brands in the US and Canada.

The joint venture will be renamed McNeil Consumer Pharmaceuticals Co, and J&J will also take ownership of the manufacturing facility located in Lancaster, Pennsylvania. The Lancaster plant is currently subject to an FDA consent decree because of production violations.

J&J said the switch would enhance the US position its McNeil division “in the important digestive-health category”.

Ben Adams

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