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Like many other drugmakers, the company is being squeezed by the weak global economy, private and government health programs pushing for lower medicine prices, and generic competition that slashes revenue from former blockbuster drugs. Last year, Merck's top seller, the asthma and allergy treatment Singulair, got U.S. generic competition. This year, the company has been hurt by plunging sales for the migraine drug Maxalt, the baldness treatment Propecia and the allergy pill Clarinex. In July, the maker of the blockbuster diabetes pill Januvia said its second-quarter profit fell by half in part because generic competition slashed revenue from several older medicines. Acquisition costs and other charges also hurt its bottom line. Merck earned $906 million, or 30 cents per share, which was down from $1.79 billion, or 58 cents per share, a year earlier. Competition from generic drugs only tells half the story about the challenges facing big pharmaceutical companies like Merck, said Gordon, the University of Michigan professor. He noted that that these companies also are not developing enough new drugs to replace the revenue they lose to the cheaper competitors. Merck said Tuesday that it still backed its adjusted 2013 profit prediction of between $3.45 and $3.55 per share. Analysts surveyed by FactSet expect $3.47 per share.
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