Merck’s CEO: ‘Huge risk’ taken in drug development requires return
The CEO of Merck, known as MSD outside of the US and Canada, commented on the ongoing debate on drug pricing during an interview at the BIO Convention in Philadelphia. The discussion occurred only a few days after Novartis priced a newly-approved SMA gene therapy as the most expensive treatment on the market at $2.1m (€1.87m) per patient.
In a recent interview, the CEO revealed that he always follows advice from his father to tune out criticism; however, he took the opportunity to address the recent discussion over drug pricing by defending the industry against arguments that patients’ access to treatments is limited by high drug prices.
The executive referred to some ‘bad actors’ within the industry, of which “we all know the names,” but he said that the public is not always able to distinguish such actors from the companies that are trying to ‘do the right thing’.
He then focused on Merck’s work and its immuno-oncology treatment Keytruda (pembrolizumab), stating, “We’re not perfect by no means, but when we came into the market with Keytruda, we could have priced it higher than the standard of care because it was better.”
“We try to do the responsible thing about pricing and about marketing,” he added.
The CEO then replied to a comment by the moderator, CNBC's Meg Tirrell, that the pharmaceutical industry is profit driven, by saying, “Absolutely, and we don’t have to apologise for that,” adding that “we have to defend capitalism” – a statement which generated applause from the audience.
Frazier said that while discussing drug pricing with the CEO of BIO, James Greenwood, the latter had said that 80% of the American public wants the government to lower drug prices; Merck’s CEO answered in turn that 100% of people want the pharmaceutical industry to find cures that are not yet developed.
The executive continued explaining that, in order for companies to develop new drugs, they need to get access to capital and, for that to happen, they need to get a return on investment that is commensurate with the ‘huge risk’ that they are taking.
“I sometimes say that this business has a sort of a noble purpose, but the capital markets don't go to church on Sunday, and they don't go to synagogue on Saturdays,” he added.
