Merck’s Annual Pricing Transparency Report Has Dropped, Which Says More About Merck Than The Industry

As is tradition, Merck is out as the first company to talk about 2023 list- and net-price changes across its portfolio. The company dropped its annual Pricing Action Transparency Report this week. Here’s how the topline numbers broke down: 

List prices: up 4.5%

Net prices: up 4.4%

Average discount: 37%

I love transparency reports because they give a glimpse into the actual economics of the drug industry and bust a lot of myths, but the Merck figures say a lot more about Merck than they do about the industry as a whole. Merck is bucking a lot of mega-trends: its net prices are rising, discounts are falling.

The reason for that is not particularly hard to divine: the company makes the best-selling drug in the world — Keytruda — which saw sales rise 19% last year. Keytruda, as a cancer drug, isn’t particularly discounted. At the same time, Merck saw sales of Januvia fall by 25% in 2023. Januvia is heavily rebated (to the tune of 90%, as CEO Rob Davis made clear at the congressional hearing this month). 

That should be enough to explain Merck’s somewhat-weird numbers. It’ll be interesting to see how other companies with transparency reports end up … Merck should be the first of a handful that will drop over the next 10 weeks or so.

It’s well worth reading Judy Stecker’s heart-rending piece in the Wall Street Journal today, where she talks about the struggle to push forward drug development in Batten disease, a condition that threatens the life of her 5-year-old. 

Judy calls on the FDA for more flexibility around ultra-rare diseases, and her points should be well-taken. We’re now at the point where we have therapies developed for incredibly small populations. Regeneron won approval last year for a drug with no more than nine patients in the United States, and Biogen has an ALS med intended for about 300 people. There is no windfall — indeed, there may be no financial gain at all — in serving those communities.  

But we’re applying regulatory approaches that were designed for much different populations, which disadvantages the development of medicines that already face headwinds. The solutions here might not be simple, though Judy suggests some common-sense ways to get started, but they’re well worth exploring. 

PBM reform is dead (for now), which means that it’s time to assign blame. The core conflict seems to have been between those who wanted a both-barrels version of reform, and those who were OK with milder regulations. Politico has the inside skinny. Modern Healthcare has more of the official reaction, with quotes from Sens. Bill Cassidy, Bernie Sanders, and Ron Wyden. It includes this gem, from Wyden: “I’m kind of slack-jawed by it because we got a 26-to-zero vote in the Senate Finance Committee, and you can’t get a 26-to-nothing vote to order a 7-Up at this point.”

The witness list for tomorrow’s Rare Disease Day hearing in the House is out. Six folks will be at the witness table, including the mother of a child with SMA, someone associated with the American Society of Gene and Cell Therapy … and Harvard PORTAL’s Aaron Kesselheim. 

This is a nice look by Jennifer Snow at the “smoothing” provision of the IRA, which allows out-of-pockets on medicine to be spread over the course of a year. There are pockets of patients for whom the provision means less consistent bills, and making sure no one gets surprised is going to take a big educational effort. There’s a Health Affairs piece on the same topic, but I really like the way that Jennifer lays out the math. 

Another Arnold Ventures staffer is going to the government. The Washington Post noticed that Rachel Weiss, formerly a VP with Arnold, has joined HHS as a senior advisor for external affairs. She’ll be looking at IRA implementation, among other things.