Merck joins pharma giants in lowering drug prices

The latest pharma giant to bow to Trump’s pressure on drug price is Merck (MRK). The company announced on Thursday that it would lower price on at least six of its drug in the US by 10% or more. However, the price rollback does not include Merck’s top blockbuster drugs like its cancer drug Keytruda and diabetes drug Januvia. This move by Merck follows that of Pfizer (PFE) and Swiss firm Novartis, who agreed to freeze the price increase for this year after Trump’s twitter lashing.

One of the critical agenda of the Trump administration was to bring down the drug prices. Many criticized Trump for not having done much to lower drug price. In 2017, he quoted “Pharma companies are getting away with murder.”  This sent the pharma stocks lower. In May this year, he claimed that pharma companies would voluntarily lower their prices. Despite the pressure, Pfizer, unfazed, increased the price of over 100 prescription drugs. This forced Trump to publicly shame pharma giants over the drug prices.

To reduce the patient’s out-of-pocket costs, Merck said it would not increase the average net price across its portfolio of products by more than inflation annually. The pharma company is also lowering the price of its hepatitis-C drug Zepatier by 60%. During the last Q1 2018, the company recorded significantly lower sales for Zepatier due to increasing competition and declining patient volumes. Zepatier generated sales of $131 million, much lower than $378 million during Q1 2017.

Related: Trump’s message doesn’t hurt Pfizer and other drugmakers

With these changes, Merck reinforces its commitment to responsible pricing. According to the second annual Pricing Action Transparency Report that Merck released in 2017, the net price across Merck’s U.S. product portfolio declined by 1.9%.

Trump’s harsh criticism, however, did not affect the pharma stocks. Even today, during the pre-market trading, shares of Merck were up 0.30% to $62.70. Pfizer share price is up 0.46% to $37.53.