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links for 2008-11-03 November 3, 2008

Posted by arikjohnson in Uncategorized.
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  • The painful cuts and reduced expectations at Merck highlight the larger difficulties of the drug industry. Yesterday, Pfizer and Schering-Plough both released earnings that exceeded the expectations of Wall Street analysts, but company control of costs had a great deal to do with these companies' strong performance. Fewer new drugs are reaching the market. Some industry executives say the average new drug is generating lower sales than in the past. And existing drugs, big sellers like Merck's Fosamax and Pfizer's Lipitor, are facing generic competition. The end result is that the drug industry is shrinking in size. "If we don't change these business models we're not going to survive as an industry, not to mention as a company," said Merck Chief Executive Richard Clark on a conference call with analysts. He said that the company's sales force is becoming more "customer-centric," even as its laboratories find new ways of evaluating basic research.
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