Merck History

Direct Answer

Merck traces its origins to 1668, when Friedrich Jacob Merck acquired the Emmanuel Pharmacy in Darmstadt, Germany. In 1827 Heinrich Emanuel Merck transformed it into a drug manufacturing company. The American company, Merck & Co., was established in 1891 as the U.S. agent for the German firm and became fully independent in 1917 when the U.S. government seized its assets during World War I. Today Merck & Co. is a separate company from Merck KGaA of Germany, and outside the United States and Canada operates under the MSD brand. Keytruda (pembrolizumab), approved by the FDA in 2014, became the world's top-selling drug by 2023 with revenues exceeding $25 billion annually.

Origins

Merck's history begins in Darmstadt, Germany. In 1668, Friedrich Jacob Merck acquired the Emmanuel Pharmacy, establishing the enterprise that would eventually become Merck KGaA. The pharmacy remained a family business for several generations. In 1827, Heinrich Emanuel Merck transformed the establishment from a traditional apothecary into an industrialized drug manufacturer, producing and selling pharmaceutical and chemical compounds at commercial scale. That 1827 transformation is regarded as the founding of Merck as a modern pharmaceutical company.

In 1891, George Merck, a grandson of Heinrich Emanuel, traveled to New York and established Merck & Co. as the American sales agent for the German parent company. In 1899 the U.S. operation was incorporated separately in New Jersey. At the outbreak of World War I, Merck & Co. remained majority-owned by the German Merck family and Merck KGaA. In 1917, following the United States' entry into the war, the U.S. government seized Merck & Co.'s assets under the Trading with the Enemy Act. The assets were sold to George W. Merck, who had been born in the United States, establishing Merck & Co. as a fully American company with no ownership connection to the German entity.

Key milestones

CEO timeline

Five eras of Merck history

German roots and American independence (1668 to 1927)

The Merck story begins as a German pharmacy operation that evolved into a pharmaceutical manufacturer over two and a half centuries. Heinrich Emanuel Merck's 1827 transformation of the family apothecary into a chemical and drug factory marked the pivot from retail to manufacturing. The American branch was created as a distribution arm in 1891 and incorporated in New Jersey in 1899. The 1917 asset seizure severed the corporate and ownership link between the two entities permanently. George W. Merck, born in the United States, acquired the American business and positioned Merck & Co. as an independent pharmaceutical innovator. The two Merck companies have remained entirely separate ever since, which is why Merck & Co. uses the MSD brand outside the United States and Canada to avoid confusion with Merck KGaA.

Science-led growth and the Vagelos era (1927 to 1994)

Under George W. Merck's leadership from 1927 to 1950, the company built a research culture that would define it for decades. Merck scientists made advances in antibiotics, vitamins, and steroid chemistry in the 1940s and 1950s. The 1944 acquisition of Sharp & Dohme expanded Merck's manufacturing and distribution scale. The Mectizan Donation Program launched in 1978 committed the company to providing ivermectin at no cost to combat river blindness in developing countries, a humanitarian initiative that continued beyond the drug's commercial lifecycle. The era culminated under P. Roy Vagelos, who served as CEO from 1985 to 1994. Under Vagelos, Merck earned recognition as America's most admired company for multiple consecutive years in Fortune magazine surveys. The 1987 FDA approval of Mevacor (lovastatin), the first statin, stood as a landmark commercial and scientific achievement. Vagelos also authorized the Mectizan donation at scale, making it one of the most cited examples of pharmaceutical corporate responsibility.

The Vioxx crisis and its aftermath (1994 to 2009)

The period from 1994 to 2009 was defined by the rise and catastrophic fall of Vioxx. Approved by the FDA in 1999, Vioxx was a COX-2 selective inhibitor marketed for arthritis pain that avoided some gastrointestinal side effects of older anti-inflammatory drugs. It became one of the world's bestselling medications within a few years of launch. In September 2004, Merck voluntarily withdrew Vioxx from the global market after data from the APPROVe clinical trial showed that patients using the drug for 18 months or more had roughly double the rate of serious cardiovascular events compared to placebo. The withdrawal triggered litigation on an enormous scale. Merck eventually resolved the bulk of U.S. lawsuits with a settlement of approximately $4.85 billion in 2007. CEO Raymond Gilmartin resigned in 2005. The crisis severely damaged Merck's revenue base and reputation and focused intense scrutiny on how pharmaceutical companies handle emerging safety signals in clinical trials. Merck responded by building out its compliance and pharmacovigilance infrastructure under Richard Clark, who succeeded Gilmartin. The 2006 FDA approval of Gardasil, the first HPV vaccine, gave Merck a major public health achievement to point to during a difficult period.

Consolidation and pipeline rebuilding (2009 to 2014)

The 2009 acquisition of Schering-Plough for approximately $41 billion was the largest deal in Merck's history and one of the largest pharmaceutical mergers of that decade. Merck gained marketed products including Nasonex (mometasone), NuvaRing (etonogestrel/ethinyl estradiol), and Remicade (infliximab) outside the United States and Canada, as well as a substantial animal health business. The deal doubled Merck's revenue base and expanded its international footprint. Kenneth Frazier, who became CEO in 2011, guided the integration and repositioned Merck's research focus around oncology and vaccines. It was under Frazier that Merck acquired the rights to pembrolizumab, the compound that would become Keytruda, through the 2009 Schering-Plough deal. Pembrolizumab had entered Schering-Plough's pipeline through an earlier licensing deal. Frazier's team recognized the compound's potential early and prioritized its development.

The Keytruda era (2014 to present)

The September 2014 FDA accelerated approval of Keytruda (pembrolizumab) for unresectable or metastatic melanoma began what would become the most commercially successful oncology drug in pharmaceutical history. Keytruda works by blocking the PD-1 protein receptor, which cancer cells exploit to evade the immune system's T cell response. Blocking PD-1 allows the immune system to recognize and attack tumor cells. Over the following decade, Keytruda received more than 40 FDA approvals across lung cancer, head and neck cancer, bladder cancer, gastric cancer, cervical cancer, triple-negative breast cancer, and numerous other indications, making it the most broadly approved cancer drug by indication count. By 2023, annual Keytruda revenues exceeded $25 billion, making it the world's top-selling drug by revenue, surpassing even long-dominant biologics in other therapeutic categories. Robert Davis, who became CEO in 2021, has managed both the expansion of Keytruda indications and the commercial cliff that will arrive when Keytruda's U.S. patent expires in 2028. To rebuild the pipeline beyond Keytruda, Merck acquired Prometheus Biosciences for approximately $10.8 billion in 2023, gaining a pipeline focused on inflammatory bowel disease. The March 2024 FDA approval of Winrevair (sotatercept) for pulmonary arterial hypertension opened a new disease area with significant commercial potential.

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References

• Merck: Our History
• SEC EDGAR: Merck & Co., Inc. Form 10-K Filings (CIK 0000310158)
• Merck Investor Relations