The company faces significant pricing pressure from global health care cost containment efforts, including increased Medicaid rebates, Medicare program changes, and government price-setting. Loss of exclusivity for several key products (e.g., Januvia, Janumet, Bridion) in various markets, and generic competition, are also major risks. Pending litigation, including product liability lawsuits (Dr. Scholl's, Gardasil), and governmental investigations, pose further financial uncertainty. Restructuring costs and charges related to acquisitions and divestitures also contribute to financial risk.
Financial Upside
Acquisitions (e.g., EyeBio, MK-1045, Elanco aqua business) and collaborations (e.g., AstraZeneca, Eisai) present potential for new product revenue streams and market expansion. Strong sales of Keytruda, Welireg, and Reblozyl, as well as new product launches (Winrevair), offer revenue growth opportunities. The expiration of statutes of limitations for certain tax assessments could lead to significant tax benefits.
