A man walks by a sign at a Merck plant in Rahway, New Jersey. 
A man walks by a sign at a Merck plant in Rahway, New Jersey.  - 
Listen To The Story

Pharmaceutical giant Merck is acquiring antibiotics maker Cubist for more than $8 billion. The deal upends conventional thinking in the market: Some 23,000 Americans die each year from infections resistant to drugs, and overprescribing worsens the problem. Yet big drug companies have been exiting the space since it’s not lucrative.

Analysts say the Merck deal may make sense for a few reasons. Drug companies are focusing more on targeted products than blockbusters. Those new antibiotics can shorten hospital stays and persuade insurance companies to pay for them. Federal grants also help companies develop new antibiotics, and more may be on the way. Finally, the scarcity of next-generation antibiotics may help drug makers raise prices.

Click below to hear an interview on the subject with Michael Kinch, director of Washington University's Center for Research Innovation in Business.


Click below for a longer interview with Jeff Wager, co-founder and CEO of Enbiotix.

As a nonprofit news organization, Marketplace is on a mission that drives what we do every day: to increase economic intelligence across the country. But we can’t do it alone. Become a Marketplace Investor today, in whatever amount you choose, and your donation will go twice as far, thanks to a dollar-for-dollar match from The Kendeda Fund.

Become a Marketplace Investor today – in whatever amount is right for you – and keep public service journalism strong. We’re grateful for your support.

Follow Scott Tong at @tongscott