Merck & Co. announced that it has sold its 50% interest in the Johnson & Johnson-Merck Consumer Pharmaceuticals joint venture or JJMCP to Johnson & Johnson affiliates, McNeil-PPC, McNeil MMP, and Johnson & Johnson.

The venture between Merck and J&J was formed in 1989 to develop, manufacture, market and distribute certain over-the-counter or OTC consumer products in the United States and Canada.

As per the agreement, Merck stated that it will receive a one-time payment of $175 million. Merck's rights to the Pepcid brand outside the U.S. and Canada are not affected by this transaction.

Merck said that termination of the JJMCP venture gives the company greater freedom to operate in the OTC consumer sector, allowing Merck to fully exploit its pipeline of Rx-to-OTC switches as well as actively pursue OTC licensing activities in the U.S. and Canada.

Following the transaction, J&J will own the venture's assets which include the exclusive rights to market OTC Pepcid, Mylanta, Mylicon and other local OTC brands where they are currently sold in the U.S. and Canada. The partnership assets include a manufacturing facility in Lancaster, PA.