China’s Corruption Crackdown Impacts Merck’s Gardasil Sales, Rattling Investors

1. Merck's Gardasil Sales Affected: Merck's CEO Rob Davis reported a slowdown in Gardasil shipments in China due to the country's recent corruption crackdown in the healthcare sector.
2. Significant Market Impact: China accounts for 60% to 70% of Gardasil's international sales, making the decline in shipments a significant concern for the company.
3. Second Quarter Sales: Merck reported $2.48 billion in Gardasil sales for the second quarter, lower than analysts' estimates of $2.5 billion.
4. Crackdown on Bribery and Corruption: The decline in sales is attributed to China's efforts to combat bribery and corruption in the pharmaceutical sector, which has affected the entire HPV market in the country.
5. Uncertainty for Investors: The sudden drop in sales has spooked investors, with Merck's shares falling 9% on the news, and the company is still unclear about whether this is a short-term or long-term issue.