[Ip-health] Reuters: Merck CEO sees legal challenge if U.S. adopts drug pricing based on other countries

Thiru Balasubramaniam thiru at keionline.org
Thu Jun 20 23:45:54 PDT 2019



Merck CEO sees legal challenge if U.S. adopts drug pricing based on other

Michael Erman


NEW YORK (Reuters) - Merck & Co Chief Executive Ken Frazier said on
Thursday a rule to base the price the U.S. government pays for some
prescription drugs in it Medicare program on lower prices in other
countries would face legal challenges if adopted.

FILE PHOTO: Ken Frazier, Chairman and CEO, Merck & Co., speaks during a
meeting of the Economic Club of New York in New York City, U.S., October 3,
2018. REUTERS/Brendan McDermid

U.S. President Donald Trump said last year that one way his administration
would seek to lower drug costs to consumers could be through an
international pricing index (IPI) that would determine what Medicare pays
for certain medicines based on the prices set in a handful of other
countries. A proposed version of the rule is expected in August.

Other developed nations with single payer systems typically pay far less
for drugs than the United States, which Trump called “global freeloading.”

“I think there will be challenges to the rule,” Frazier told reporters
following the drugmaker’s investor day in New York. “A lot of people have
objections to that rule. It’s not just pharmaceutical companies.”

Frazier, a lawyer by trade, did not say whether Merck would launch its own
legal challenge to the proposed rule.

The company was one of three U.S. drugmakers that sued the U.S. Department
of Health and Human Services this week over a new government regulation
requiring them to disclose the list price of prescription drugs in
direct-to-consumer television advertisements.

Of the Trump administration proposals to lower drug costs, the IPI option
is the one Frazier said most concerns him, due to the effect importing
price controls from other countries might have on innovation and patient
access in the United States.

“We tell incomplete stories about those markets,” Frazier said, noting that
some countries ration treatments available to patients. He pointed to lower
survival rates for lung cancer in Britain, which has an agency that can bar
the use of approved new medicines based on their cost.

Earlier on Thursday, Merck executives touted the company’s pipeline of
experimental drugs beyond its blockbuster cancer treatment Keytruda.

The investor event was also an opportunity for Merck to showcase executives
other than Frazier, who turns 65 in December. Last year, the company
scrapped its mandatory retirement age of 65 for its CEO, saying it gave the
board flexibility around finding his successor.

“I’m extremely pleased by the breadth of the leadership talent at the
company,” Frazier said in response to a question about succession. “I know
that the board feels the same way. And they will continue to look at when
the right opportunity is ... to make a selection.”

Reporting by Michael Erman; Editing by Bill Berkrot

Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International
41 22 791 6727
thiru at keionline.org

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