Trump just put Merck's CEO on blast over drug prices - here's what the company's track record actually looks like
- President Donald Trump called out Merck CEO Kenneth Frazier after he resigned from the president's manufacturing council, saying that Frazier will have more time to lower drug prices.
- Merck, a major pharmaceutical company, hasn't been among the drugmakers called out for hiking the price of prescription drugs and has taken steps to be more transparent about how it sets prices.
Merck's CEO Kenneth Frazier left the president's manufacturing council, after the Trump administration failed to explicitly denounce white nationalism after violence erupted over the weekend in Charlottesville, Virginia.
Almost immediately, President Donald Trump fired back, turning the conversation toward drug pricing. Trump has been vocal about the rising price of prescription drugs, though he has been largely quiet on the topic in the past few months apart from a reported draft drug pricing executive order.
Trump said in a tweet that now Frazier has resigned, "he will have more time to LOWER RIPOFF DRUG PRICES!"
Merck, which known for its cancer immunotherapy drug Keytruda and its vaccines business, has not been among the pharmaceutical companies that have been called out for hiking the prices of prescription drugs. That's unlike the makers of the emergency allergy medication EpiPen, companies that make a life-saving diabetes medication, and, perhaps the most infamous, the company that raised the price of a decades-old drug to treat a parasitic infection by 5,000%.
Here's Merck's track record with drug pricing
- In January, Merck published a report that outlined the company's average list price increases for its products. Merck was one of only a handful of big pharmaceutical companies to disclose, alongside the list price, the net prices - or the amount Merck actually receives after factoring in rebates and other discounts that drugmakers payout. In 2016, Merck raised prices by an average of 9.6%. But after factoring in rebates, that was just 5.5% (a rate that's still higher than the rate of inflation). "We've taken a close look at our pricing practices - and we believe we have a good track record," Adam Schechter, president of global human health at Merck wrote in an accompanying post in January. "Since 2010, Merck's average net price increase across our portfolio each year has been in the low to mid-single digits: specifically, 3.4 percent to 6.2 percent."
- Frazier has also been quick to distance himself from companies and individuals like former pharmaceutical CEO Martin Shkreli that jack up the price of prescription drugs."He is not us," Frazier said at a 2015 industry conference.
- Which isn't to say Merck isn't a profitable corporation. In the second quarter of 2017, Keytruda, Merck's blockbuster cancer immunotherapy drug that first hit the market in 2014, generated $881 million in sales. A treatment course of cancer immunotherapy can cost more than $100,000, depending on how long patients stay on the drug.
- Some drug companies have committed to only single-digit list price increases, or other caps on the list price. Merck hasn't been among the companies that have made such promises.