Merck & Co.: Split From German Merck in 1917, Streptomycin and Vioxx

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Merck began in 1668 when Friedrich Jacob Merck bought the Angel Pharmacy in Darmstadt, Germany. In 1827 the family business industrialized morphine extraction from opium, later doing the same with cocaine. In 1891 longtime employee Theodore Weicker and 23-year-old George Merck, grandson of the German company's founder, set up an American branch in lower Manhattan with $200,000 from the parent. Under the Trading with the Enemy Act of 1917 the U.S. government seized 80 percent of the subsidiary, and in 1919 George F. Merck, backed by Goldman Sachs and Lehman Brothers, bought it back at auction for $3.5 million. The split was permanent: the American company holds the Merck name in the U.S. and Canada and the German Merck Group everywhere else, and they still sue each other, including a 2016 UK High Court ruling and U.S. countersuits.

Cut off from Darmstadt's labs, the American company built its own research engine. Selman Waksman's Merck-funded Rutgers lab discovered streptomycin in 1943, and Merck gave up its exclusive rights for a royalty so seven makers could supply the TB drug. Maurice Hilleman developed the first mumps and rubella vaccines and the combined MMR. William C. Campbell and Satoshi Omura developed ivermectin, which Merck donated as Mectizan against river blindness, and the lab produced thiazide diuretics and, in 1979, lovastatin, the first statin. Then came Vioxx, approved in 1999 and withdrawn in 2004 over links to heart attacks and strokes. More than 50,000 people sued, internal emails referred to critical doctors and said the company may need to "destroy them where they live," and Merck settled most suits in 2007 for $4.85 billion, below analyst estimates of $10 billion to $25 billion.

• Before Hilleman's rubella vaccine there were up to 10,000 virus-linked birth defects a year in the U.S.; afterward the number dropped to zero.
• From 2002 to 2005 Merck's Australian affiliate paid Elsevier to produce the Australasian Journal of Bone and Joint Medicine, a compilation favorable to Merck products with no clear funding disclosure on the cover.
• In 2008 Merck paid $650 million to settle whistleblower suits alleging Medicaid overbilling and kickbacks.
• The 2009 Schering-Plough deal, valued at $41 billion, was structured as a reverse merger to keep Schering-Plough's Remicade marketing rights.
• Keytruda earned $29.5 billion in 2024, 46 percent of Merck's revenue, alongside $8.6 billion from Gardasil.