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SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 11, 1995
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MERCK & CO., Inc.
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(Exact name of registrant as specified in its charter)
New Jersey
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(State or other jurisdiction of incorporation)
1-3305 22-1109110
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(Commission File Number) (IRS Employer Identification No.)
One Merck Drive, PO Box 100, Whitehouse Station, NJ 08889-0100
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (908)423-1000
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Item 5. Other Events
Incorporated by reference are the following press releases issued by
the Registrant, attached as Exhibits 99(a) and 99(b), providing information
which the Registrant deems of importance to security holders:
(a) Press release issued July 11, 1995 concerning the
Registrant's announcement of the signing of a definitive agreement to
divest its ownership of Medco Behavioral Care Corporation (MBC) to MBC
management and Kohlberg Kravis Roberts & Co.
(b) Press release issued July 17, 1995 concerning the
announcement by Wyeth-Ayerst Laboratories, a division of American Home
Products Corporation, and Medco Containment Services, Inc., a
subsidiary of the Registrant, of the formation of a joint venture
company to develop, market and implement comprehensive disease
management and health management programs in several therapeutic
categories.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit 99(a) - Press release issued July 11, 1995.
Exhibit 99(b) - Press release issued July 17, 1995.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf by
the undersigned hereunto duly authorized.
MERCK & CO., Inc.
By: /s/ Nancy V. Van Allen
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Nancy V. Van Allen
Assistant Secretary
July 19, 1995
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EXHIBIT INDEX
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Exhibit
Number Description
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99(a) Press release issued July 11, 1995.
99(b) Press release issued July 17, 1995.
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EXHIBIT 99 (A)
FOR RELEASE
JULY 11, 1995
3:00 PM EDT
Contact: Lisa Suennen
Medco Behavioral Care Corp.
201-782-5915
Gary Lachow
Merck & Co.
908-423-6022
Ruth Pachman
Kekst and Company
for KKR
212-593-2655
MEDCO BEHAVIORAL CARE CORPORATION (MBC) MANAGEMENT
AND KOHLBERG KRAVIS ROBERTS & CO.
TO ACQUIRE MBC FROM MERCK & CO.
Whitehouse Station, NJ, July 11, 1995 -- Merck & Co., Inc. announced today the
signing of a definitive agreement to divest its ownership of Medco Behavioral
Care Corporation (MBC) to MBC management and Kohlberg Kravis Roberts & Co.
(KKR), for $340 million, of which approximately $315 million will be in cash.
MBC is one of the nation's largest managed behavioral healthcare companies,
providing behavioral health managed care and employee assistance services to
more than 15 million persons across all 50 states.
The decision to divest MBC reflects Merck's intention to focus its resources on
its core human and animal health business. In 1993, Merck divested Calgon Water
Management and, in 1994, Merck sold Calgon Vestal Laboratories and Kelco --
other non-core businesses. Under the agreement, MBC will become an independent,
privately-held company in which Merck will retain a small minority ownership
interest.
"With the expertise of our management and the support of KKR, a leading private
investment firm, MBC will have both the flexibility and stability it needs to
forge future growth and continue innovation in its products and services,"
observed Albert S. Waxman, Ph.D., a founder of MBC and its chairman and chief
executive officer. "MBC has an outstanding record of growth in an increasingly
competitive market," added Waxman. "As we build MBC's future as an independent
company, we are committed to
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maintaining the optimal structure to organize, deliver and finance high quality,
cost-effective care. Working in partnership with KKR will give us the financial
strength and resources to achieve our strategic vision, maintaining the high
quality of MBC care while further expanding our business opportunities."
"We are extremely pleased to be partnering with MBC," said Henry R. Kravis and
George R. Roberts, founding partners of KKR. "Several years ago when we began
looking at investment opportunities in the healthcare industry, our goal was to
find a company with excellent long-term growth potential, a leadership position
in its market, and a top-notch management team. Medco Behavioral Care meets all
of these criteria and, in addition, participates in a fast-growing and dynamic
specialty area, behavioral health. We look forward to working with Al Waxman,
Shannon Kennedy and their entire management team in capitalizing on new business
opportunities, expanding the scope of services, and building a strong franchise
for the future."
Pending regulatory review and other customary closing conditions, the
transaction is expected to be finalized within approximately 60 days.
"There will be no change in our existing operations," said Waxman. "It will be
business as usual for service and financial arrangements with our customers and
their covered beneficiaries as well as with providers and facilities that
currently have contractual relationships with us," he added. "We remain
committed to providing value and high quality services to our customers and
enrollees and, as an independent company, we will be even better positioned to
keep focused on these core commitments."
Noted for innovation in the management of behavioral healthcare, MBC is the
nation's first managed behavioral care organization to address all major public
and private payer markets, offering a full range of high quality, customized
behavioral health managed care and employee assistance programs. MBC has led the
industry in developing programs for the public sector, particularly for Medicaid
populations. The company is also the industry's foremost provider of "capitated"
programs, under which MBC provides comprehensive coverage for fixed premiums and
assumes full risk for claims and administrative costs. MBC revenues for the year
ending December 31, 1994, were approximately $300 million.
Albert S. Waxman, Ph.D., will remain chairman and CEO of the new company.
President and COO Shannon R. Kennedy, Ph.D., and all other key MBC executives
will remain in their current positions. MBC headquarters will remain in Park
Ridge, New Jersey.
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Created in 1993, after the integration of several of the industry's leading
managed behavioral healthcare companies, MBC provides customized managed
behavioral health and employee assistance programs, through a national network
of more than 28,000 staff and network providers and facilities.
KKR is a private investment firm with offices in New York, New York and Menlo
Park, California. KKR's business is making equity investments for long-term
appreciation. Since its founding in 1976, KKR has completed over 40 transactions
involving more than $75 billion of total financing. The company's diverse
portfolio includes American Reinsurance, Duracell, Owens-Illinois, Borden,
Safeway and K-III Communications.
Merck & Co. is a leading research-driven pharmaceutical products and services
company. Merck discovers, develops, manufactures and markets a broad range of
innovative products to improve human and animal health. The Merck-Medco Managed
Care Division manages pharmacy benefits for more than 40 million Americans.
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EXHIBIT 99 (B)
FOR IMMEDIATE RELEASE
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Media Contacts: Merck-Medco: Wyeth-Ayerst:
Kevin Colgan Audrey Ashby
908-423-4341 610-971-5823
Investor Contacts: Merck & Co., Inc. American Home Products
Jim Hinrichs Thomas Cavanagh
908-423-6883 201-660-5706
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MEDCO AND WYETH-AYERST FORM JOINT VENTURE
TO DEVELOP DISEASE MANAGEMENT PROGRAMS
Philadelphia, PA/Montvale, NJ, July 17, 1995 -- Wyeth-Ayerst
Laboratories, a division of American Home Products Corporation (NYSE:AHP), and
Medco Containment Services, Inc., a subsidiary of Merck & Co., Inc. (NYSE:MRK),
today announced the formation of a joint venture company to develop, market and
implement comprehensive disease management and health management programs in
several therapeutic categories.
The venture will initially develop disease management programs for
women's health in areas such as prenatal care, menopause, osteoporosis and
family planning. Programs will also be developed for other important therapeutic
categories such as arthritis and cardiac arrhythmias.
"Increasingly, health-care payors and plan sponsors are seeking to
integrate pharmaceutical care within the health-care system in order to more
effectively manage, monitor, and measure treatment outcomes," said Per Lofberg,
President of the Merck-Medco Managed Care Division. "The mission of this new
joint venture company will be to meet the need for integrated disease and
patient management services in women's health and other therapeutic areas,
thereby improving care and reducing overall costs."
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"This joint venture gives us an opportunity to expand our role in the
managed care marketplace and meet the evolving needs of today's health-care
payors," said Robert Essner, President of Wyeth-Ayerst Laboratories. "We intend
to provide significant benefits through programs that appropriately encourage a
comprehensive approach to patient care and produce systematic measurements of
health outcomes for broad populations, as well as individual patients."
All of the venture's programs will be based on the consensus expert
medical opinion of an independent medical advisory board. The joint venture will
not undertake pharmaceutical product contracting, formulary management or any
other traditional pharmaceutical benefit management activities.
The joint venture will market disease management programs to employers
and managed care organizations, such as health maintenance organizations and
preferred provider organizations. Both Medco and Wyeth-Ayerst also will have
marketing rights for all programs developed by the joint venture for their
managed care and non-managed care customers. Detailed terms of the agreement
were not released.
An executive committee, comprised of members from both Medco and
Wyeth-Ayerst, will be formed to oversee management of the venture. The joint
venture will have its own independent staff and will be directed by a chief
executive officer who will report to the executive committee.
Raymond V. Gilmartin, Merck Chairman and Chief Executive Officer, said,
"Wyeth-Ayerst brings outstanding clinical expertise to this joint venture in
disease categories such as women's health and arthritis, adding to the fields in
which Medco and Merck are already active with programs, such as for
cardiovascular and respiratory diseases. This joint venture builds on the
success Merck-Medco has achieved over the past 18 months in demonstrating to
plan sponsors the value of a coordinated disease
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management approach in optimizing patient care and controlling overall
health-care costs."
"Medco is an ideal partner for this joint venture based on its unique
capabilities to meaningfully influence patient care," said John R. Stafford,
Chairman, President and Chief Executive Officer of American Home Products
Corporation. "Medco's strengths applied to managing patient care and outcomes
for more than 40 million people, combined with Wyeth-Ayerst's unparalleled
expertise in many important therapeutic categories, will bring significant
benefit to payors, providers and patients."
Merck & Co., Inc. is a leading research-driven pharmaceutical products
and services company. Merck discovers, develops, manufactures and markets a
broad range of innovative products to improve human and animal health. Its Medco
subsidiary manages pharmacy benefits for more than 40 million Americans (as of
12/31/94), encouraging the appropriate use of medicines and providing disease
management programs. Through these complementary capabilities, Merck works to
improve quality of life and lower overall health-care costs.
American Home Products Corporation is a world leader in the research,
development and marketing of pharmaceuticals and other health care products. It
is also a leader in agricultural products, animal health care, and food
products. Wyeth-Ayerst is a major research-oriented pharmaceutical company with
leading products in the areas of women's health care, cardiovascular and
metabolic disease therapies, central nervous system drugs, anti-inflammatory
agents, vaccines, infant nutritionals and generic pharmaceuticals.
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