Cost of Revenue: A Tale of Two Giants

In the ever-evolving pharmaceutical industry, understanding cost dynamics is crucial. Over the past decade, Merck & Co., Inc. and Amgen Inc. have showcased contrasting trends in their cost of revenue. From 2014 to 2023, Merck's cost of revenue has seen a modest decline of approximately 4%, while Amgen's costs surged by nearly 90%. This divergence highlights differing strategic approaches: Merck's focus on cost efficiency versus Amgen's investment in growth and innovation.

Key Insights

• Merck & Co., Inc.: Starting at a peak in 2014, Merck's cost of revenue decreased by 24% by 2017, before stabilizing around $14 billion in recent years.
• Amgen Inc.: In contrast, Amgen's costs remained steady until 2019, then jumped significantly, reaching a high in 2023.

These trends reflect broader industry shifts and strategic priorities, offering valuable insights for investors and stakeholders.