- Merck & Co. joined the ranks of big pharmas taking pricing pledges this week, along with the likes of Pfizer, Novartis and reportedly, Roche. The company expects the announced price cuts will take place in the fall.
- Merck said Thursday evening that it would cut the cost of hepatitis C medicine Zepatier by 60% and would lower the cost of six other medications by 10%, including Prinivil, Proscar, Remeron, Sinemet, Sinemet CR and Trusopt.
- The New Jersey pharma also said that it would "not increase the average net price across our portfolio of products by more than inflation annually."
Merck & Co. is just the latest pharma to make a public show of its pricing policies, but much like pledges from Pfizer and Novartis, the moves may do more to help the industry's public relations image than realistically make a dent into healthcare system costs.
Amid public shaming from President Donald Trump, drugmakers are feeling the pressure to take some sort of action. Trump has promised to lower drug prices since the campaign and as is his style, has resorted to calling out companies by name on Twitter after reports of price increases. (Although Novartis notes it made the decision weeks prior to this.)
Both Pfizer and Novartis have said that they will not take the price increases that the industry typically takes at the end of the second quarter, and will instead hold off on those increases until next year. Neither of these moves will lower prices, and are merely short-term. But the companies have garnered praise from Trump, who has assumed bragging rights for being successful in lowering drug prices.
While Merck is actually making the move to lower prices, the pledge will likely to have little impact.
Zepatier (elbasvir/grazoprevir) has largely been driven out of use in the hepatitis C space by much more effective treatments from both Gilead Sciences and AbbVie. In fact, Merck did not record any U.S. sales for the product in the first quarter of this year. Merck has yet to report second quarter sales.
As for the other six products that Merck said it would take a haircut on, the products are so insignificant that Merck does not even break out sales of the drugs in its Securities and Exchange Commission filings.
Evercore ISI analyst Umer Raffat pointed out in a note to clients that based on IMS data, "these six drugs with 10% price decrease add up to less than 0.1% of Merck's total sales."
According to the IMS data provided by Raffat, the six drugs collectively brought in approximately $12 million during all of 2017. For context, Merck brought in $8 million in U.S sales during just the first quarter from its statin Vytorin (ezetimibe/simvastatin), which went generic in the beginning of 2017. On the other end of the spectrum, Merck's blockbuster PD-1 inhibitor brought in $838 million in U.S. during the same three-month period of 2018.