P&G acquires Merck’s consumer health business

In a continued trend, pharmaceutical companies are offloading their low margin consumer health divisions to focus on high risk, high reward prescription drug discovery business. German based Merck found a partner in Cincinnati headquartered P&G to sell it’s consumer health business, which features OTC products such as Neurobion, Femibion, Nasivin, Bion3, Seven Sea for muscle, joint, back pain and mobility. Products we don’t hear much about, because they are primarily sold in Europe, South America and APAC.

The acquisition will strengthen P&G’s consumer health business, where health currently makes up 1 out of every 8 products in sales, complementing brands such as Vicks, Pepto-Bismol, Crest and Oral-B.

It was less than 10 years ago since P&G divested it’s prescription drug discovery business. With this acquisition, it aims to dominate in retail consumer health by expanding scale, portfolio and category.

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GSK diversifies revenue with Consumer Health division

According to the FT, GSK bought out Novartis 36.5% stake in their consumer health joint venture partnership for $13B. That move brings to GSK – sole ownership of products such as OTC tooth paste Sensodyne while enabling GSK to strengthen its consumer health division within its three main revenue drivers.

GSK’s consumer health division make up approximately 25% of sales while the Pharma drug discovery arm make up 50% of sales. The other 25% of sales comes from vaccines.

The company was originally set to acquire Pfizer’s Consumer Health arm for a similar price in a diversification strategy that would have given it the OTC brand – Advil.

Pfizer’s consumer health arm remains on sale.