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Merck, Schering-Plough plan merger

Sign in front of Merck offices in Lansdale, Penn.

TEXT OF INTERVIEW

Steve Chiotakis: Another multibillion-dollar drug deal is in the works. This morning, drug makers Merck and Schering-Plough say they're getting together.

We're joined by Ashley Milne-Tyte, who is looking into this merger. Ashley, tell us more about this morning's developments.

Ashley Milne-Tyte: The deal is worth more than $41 billion in cash and stock. And the new company will take on Merck's name, so Schering-Plough will become a thing of the past. And the companies overlap in a lot of the kinds of drugs that they make. So cholesterol is a big area for both companies, and so are drugs for things like asthma and hay fever. And that's seen as being a very stable market, because those conditions aren't likely to go away anytime soon.

Chiotakis: And Ashley, just a few months ago, we had Pfizer buying Wyeth in a deal that was what, close to $70 billion? Why are we seeing drug companies merging like this now?

Milne-Tyte: Well, one huge concern of a lot of these drug makers is some of their most popular drugs are coming off patent in the next several years. So that means generic drug makers will be able to step in and make those drugs and sell them for a lot less than the big companies have been selling them for. So for a big company like Merck or like Pfizer, teaming up with another let's them capitalize on new drugs in the research pipeline. And on top of that, there's probably going to be some pressure from the Obama administration as they work on health care reform for drug companies to bring down prices. So that's another reason two big drug makers might want to get together.

Chiotakis: All right, Ashley Milne-Tyte joining us from New York. Ashley, Thank you.

Milne-Tyte: You're welcome.

About the author

Ashley Milne-Tyte is the host of a podcast about women in the workplace called The Broad Experience.

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