Merck earnings highlight problems facing Big Pharma

Merck & Co. (MRK) reported first-quarter earnings Tuesday morning. The drugmaker posted a 57 percent drop in first-quarter income to $1.43 billion, or 67 cents per share. Excluding items, earnings were 74 cents a share, below consensus estimates of 77 cents a share. Similarly, revenue declined eight percent to $5.39 billion, also below estimates.

Merck blamed the decline on foreign exchange, which negatively affected global sales performance. It also lost U.S. marketing exclusivity of Fosamax. In addition, the comparison quarter of 2008 net income included a $1.4 billion gain on a distribution from AstraZeneca LP.