With its $5.5 billion seller Singulair going off patent in two months, things will be a little dicey for the next couple of years at Merck ($MRK). But CEO Kenneth Frazier assures shareholders that the pipeline will prevail. 

In case any of them missed it, Frazier reminded shareholders at Merck's annual meeting Tuesday that the patent on the blockbuster asthma and allergy drug expires Aug. 3. But its Januvia portfolio of diabetes drugs have become the best-selling branded diabetes medications in the world, and it also can look to increasing revenues from the hepatitis C drug Victrelis. 

Just this week, the Centers for Disease Control recommended that all of the 70 million U.S. baby boomers be tested for hep C because of the high rates of infection in that age group. More testing will mean more people being diagnosed and more prescriptions for drugs like Victrelis. 

Frazier took over in January 2011 for Richard Clark, who had already done a lot of the heavy lifting to prepare for Merck's challenges. The company has been reducing its costs by about $5 billion annually, in large part by eliminating about 20,000 positions, a 30% workforce shrinkage. It also paid $41.1 billion several years ago for Schering-Plough to help cushion the patent loss blow, gaining full rights to cholesterol drugs Vytorin and Zetia, as well as its current No. 2 seller, Remicade.