Merck Lowers Price of Some of its Older Drugs; Presidential Pricing Controversy


Pharma giant Merck is the latest company to announce it is lowering the cost of some of its drugs as pricing has come into the crosshairs of President Donald Trump. Merck said it will lower the cost of one drug by 60 percent and several other drugs by 10 percent. None of the drugs are blockbuster treatments and are not significant revenue drivers for the company.

Merck’s announcement comes shortly after Pfizer raised the ire of Trump over a second-round of drug hikes this year and ultimately rescinded those increases following political pressure. Novartis also halted planned increases on some of its drugs following the Pfizer kerfuffle.

In a brief announcement Thursday, Merck said it will lower the cost of its hepatitis C drug Zepatier by 60 percent. However, Zepatier has not been a top money earner for Merck in a long time. In fact, in Merck’s first quarter report for this year, Zepatier failed to show any real recorded revenue for the company following rebate payments to insurers, the New York Times noted. The Times noted that in the first quarter of 2018, Zepatier generated $131 million in global sales – down 65 percent from the previous year’s first quarter. Following the payment of rebates to insurers, Merck recorded zero dollars in U.S. sales, the Times said. Zepatier has struggled as a revenue driver for a number of reasons, including a shrinking patient population due to competitor treatments that are virtual cures for HCV, such as Gilead Science’s Harvoni and Sovaldi.

In addition to the reduction on its hepatitis C treatment, Merck said it will reduce the costs of six drugs by 10 percent. Those six drugs are blood pressure medicine Prinivil; prostate treatment Proscar; antidepressant Remeron; Parkinson’s disease drug Sinemet, including its sustained release formula; and glaucoma drug Trusopt. While the reduction may be welcome to some patients, each of the drugs included in this reduction has lost patent protection. The drugs all have generic equivalents on the market.

In its announcement, Merck said it is committed to a responsible pricing of its prescription products. The company said it has committed to not increase the average net price of its portfolio of products by more than the annual rate of inflation. In selecting the drugs to reduce the prices on, Merck said the decision was based on a number of factors including “the gap between list price and actual discounted (net) prices paid in the market, the contractual obligations under existing arrangements with payers, and the opportunity to broaden access to treatment.” Merck pointed to its annual Pricing Action Transparency Report as a commitment to responsible pricing. In 2017 the company said net prices across Merck’s U.S. product portfolio declined by 1.9 percent.

“Going forward, we will continue to evaluate our portfolio of products to look for opportunities to further reduce costs for patients and the health care system,” Merck said. “We believe that further changes are still necessary to help reduce patient out-of-pocket costs.”

Drug pricing has been a controversial subject for some time and has been a favorite punching bag for Trump who claimed before his inauguration that the pharmaceutical industry was “getting away with murder” due to the pricing of some medications. Novartis announced its decision to stay its planned price increases earlier this week. Novartis Chief Executive Officer Vas Narasimhan said the company wants the consumer cost of its medicines to be both “reasonable” and “defensible” to patients. Novartis will hold off on the increase as it faces scrutiny over its relationship with Michael Cohen, Trump’s former attorney who has been accused of attempting to sell access to the Trump administration.

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