Merck beefs up in S. Africa with Adcock deal

Merck is taking another step in its campaign for emerging-markets revenue. The company has teamed up with South African drugmaker Adcock Ingram in a marketing-and-distribution deal, hoping to expand its footprint in that country. The two companies will work together to sell some over-the-counter products as well as prescription meds for asthma, high blood pressure, migraines, cholesterol and osteoporosis.

Right now, Merck has 4.7 percent of the South African drugs market, but company officials hope this deal can help boost that share dramatically. Merck is aiming to source one-quarter of its global pharma and vaccine revenues in emerging markets by 2013. "There's no reason why we shouldn't have the same position in South Africa as we would have worldwide," Stefan Oschmann, Merck's head of emerging markets, told Reuters.

Merck's deal with Adcock Ingram resembles GlaxoSmithKline's partnership with Aspen Pharmacare, first forged in 2008. The British company began with a product distribution deal with Aspen, South Africa's biggest drugmaker. Then, late last year, it bought a 19 percent stake in Aspen in an asset-swap deal. Will Merck end up taking a stake in Adcock? Some analysts think it's a possibility. We'll have to wait and see.

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