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. Last Updated: 07/27/2016

The Traveling Medicine Man

For seven years running, the pharmaceutical giant Merck Sharp & Dohme has been voted "The Most Admired Company in America" by Fortune 500 polling. A solvent, progressive firm heavily into research and development and enlightened benefit programs, Merck has enjoyed the most growth in one of the world's biggest growth industries.


Now David Valez, a Merck man who has carried his company's banner around the globe, is trying to create that same magic in one of the world's most complex markets. From a one-man operation working out of a hotel lobby 18 months ago, Valez has put together a staff of 33 in Moscow, with hopes of having a 75-person payroll, in new office space, by the end of the year.


Still, he admits with a dose of good humor, "Nothing comes easy here".


Born in Mexico, the son of a U. S. diplomat, Valez received a master's in marketing from Columbia University and shortly thereafter joined Merck, where he has been a self-admitted "gypsy for the company".


After several postings throughout Latin America, Valez moved his family to Moscow from Puerto Rico, where he had headed Caribbean operations. On the matter of life in a new world and a harsher climate, Valez says his three children, students at the Anglo-American School, and his wife Alina, who works part time for the U. S. Embassy, "love it". On the professional side of the ledger, Valez is focused and succinct.


"Merck has a long-term view of the former Soviet Union", Valez says. "The company has decided to commit itself to this country even if the current operating and economic circumstances might make things very, very difficult. One of my main objectives is to set up and train a national organization which can eventually help the company achieve its goal of becoming the most admired in the former Soviet Union, as we are in the United States".


Given the medical problems facing Russia, Valez has his work cut out for him.


"The needs for pharmaceuticals are enormous", he says. "This is a country that, due to this breakdown, is starting to suffer shortages of some essential medicines".


"Unfortunately, the needs that the former Soviet Union has right now are for more basic drugs, like aspirin or treatments for diabetes. This is going to change in the future as these basic needs are fulfilled and the government sarts to focus on more serious diseases.


"The other big problem", he continued, "is the lack of foreign currency to pay for imported pharmaceuticals. So even though there is this huge need and potential market, the interim situation is difficult".


It is corporate tradition for Merck not to hesitate once they establish a foothold in a country. Since Valez's initial solo mission, the company now has representatives throughout Russia and several other former Soviet republics and it is contemplating full-scale manufacturing.


"It is evident that if you want a strong presence in these markets, you must develop your local infrastructure through vertical integration", says Valez. "We are in the early stages of a feasibility study, and if we get support from the government to do it, Merck will, say in a five-year frame, start up a very, very large plant, not only to supply the needs of Russia, but to export to the Eastern European markets".


Valez is unabashedly pro-Russian and one gets the sense that it is not just for show.


"I love being here and my family loves being here", he says. "I lived many years in Latin America and this type of environment is not very new. I used to live in Argentina when the monthly inflation rate was over 1, 000 percent. I've found Russians are very warm in heart and spirit -- very much like Latin Americans. I've found Russians have a very open mind toward foreigners".


"Yes, it is a rough environment", Valez adds, "but I think this is the best thing that has ever happened in my life. I must also say that last year was one of the most difficult years in my life because nothing is easy here. What frustrates me here is not the normal challenges you find in any other country, like not being able to accomplish your business objectives, but the little things like getting paper clips. But overall the amount of pride in the kind of things we are doing in Russia is enormous and we feel very, very lucky to be here".