The Phaserl


Merck Executive Explains Why Drug Prices Are Out of Control

by Christina Sarich, Natural Society:

Kenneth Frazier, a chief executive of Merck & Co. and chairman of the industry lobbying group Pharmaceutical Research and Manufacturers of America, wants you to know why drug prices have gotten so out of hand.

According to Frazier:

“Merck has increased the prices of its drugs on a yearly basis, but we’ve tried to be constrained in how we’ve done it, in a way we think doesn’t prevent people from affording our drugs. There’s a huge challenge we face between trying to optimize access to our drugs in whatever pricing we establish, and trying to ensure that you have the resources to continue to pursue the next generation of drugs. We try to take a responsible, balanced approach.”

When asked by the Wall Street Journal, “What would be a way to link the price of drugs to the value they bring?” Frazier replied:

“For example, charging people a price commensurate with the actual outcomes that drugs produce. Now, there are a lot of barriers in the system to sharing risk with some of our customers. The laws around what we can and cannot do in our pricing model were made for a different environment. They weren’t made for performance-based contracting or risk-sharing or any of those kinds of experimental approaches to pricing that Merck actually is very eager to try out with some of its customers.”

Taking a Closer Look

Let’s take a closer look at these claims by one of Merck’s highly paid executives:

  • Merck recently spent $9.5 billion on marketing its drugs. The company spent only $7.5 billion on research and development. This means that the pharmaceutical company, like many othe

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1 comment to Merck Executive Explains Why Drug Prices Are Out of Control

  • rich

    Ionis Breakthrough
    This is what Lynne Parshall, Ionis’s COO, said at the Leerink conference. A transcript costs $125. I transcribed from the audio about the open-label study in infants (I used bold font for emphasis):
    Our study has not yet gotten to a median. All of the infants who are continuing in the trial, which is over 70% of patients who enrolled in the high dose cohort in the study are over 2 years old. We have substantial divergence from the natural history. Natural history studies show that at 18 months only 20% of infants are event-free.
    Probably more important than that is that we are seeing continued improvement in two different measures of motor milestones. One of them is CHOP-INTEND that has been specifically designed for children with SMA that looks at movements against gravity. Once children are diagnosed with type1 SMA, their chop-intend scores decline steadily overtime. What we are seeing out at about 21 months, we see a 22 point increase in CHOP-INTEND scores with many of the infants being at the top set of scores that you can receive on CHOP-INTEND.
    We are also looking at development milestones, so you know holding up their head up straight, being able to roll over, being able to sit, stand, walk. And as you know infants with Type-1 SMA are never expected to sit, let alone doing any of these more complicated things. We have 8 children sitting independently or with assistance in our study. We have several children who are standing with assistance. And we have one child who actually is walking independently.
    We are having very positive and productive ongoing dialogue both with the European health authorities as well as the FDA, about the possibility of an earlier route to registration.

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