- President Donald Trump called out Kenneth Frazier after the Merck CEO resigned from the president’s manufacturing council. Trump said the resignation would give Frazier 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 on Monday after President Donald Trump failed to explicitly denounce white nationalism over the weekend when violence erupted in Charlottesville, Virginia.
Trump fired back almost immediately, 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 resigning from the council would give Frazier “more time to LOWER RIPOFF DRUG PRICES!”
Merck, which is known for its cancer immunotherapy drug Keytruda and its vaccines business, is not among the pharmaceutical companies that have generally been called out for hiking the prices of prescription drugs. Those companies include the maker of the emergency allergy medication EpiPen, companies that make a life-saving diabetes medication, and, perhaps most infamously, 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 outlining 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 pay out. 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, the 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 people 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. That isn’t to say Merck isn’t a profitable corporation. Keytruda, Merck’s blockbuster cancer-immunotherapy drug that first hit the market in 2014, generated $881 million in sales in the second quarter of 2017. 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 to other caps on the list price. Merck hasn’t been among the companies that have made such promises.