(Bloomberg) -- Merck & Co. keeps a disciplined approach to drug pricing and is “restrained” when it comes to price hikes, Chief Executive Officer Ken Frazier said Thursday in an interview.
“I'm not saying we're perfect,” he said Thursday after speaking on a panel at the Forbes Healthcare Summit in New York. “There will always be an individual drug in an individual year that you can point to and say, ‘That looks large in relation to others.' But if you look at the whole portfolio, you will see that Merck has tended to be rather restrained when it comes to drug prices.”
Speaking earlier on a panel about cancer treatments, Frazier said raising drug prices without any corresponding benefit is a “foolhardy” move for companies. He also said measuring the value of combination therapies to treat cancer is difficult to do since the approach is still in its early stages.
Drugmakers such as Mylan NV and Valeant Pharmaceuticals International Inc. have come to symbolize rising health-care costs, and their executives have been ordered to testify before Congress on the issue. Mylan CEO Heather Bresch spoke at the Forbes conference as well, defending the company's sixfold increase in the EpiPen's price since 2007 and saying Mylan invested in the emergency allergy shot's design and increasing access to its use.
Politics and Economics
Frazier said in the interview that the drug-pricing debate isn't leaving the national stage, partly because it's both political and economic in nature. Drug prices should be taken in context with the total costs of treating cancer, which can be quite high when hospital bills, among others, are included, he said.
While mergers and acquisitions in the health-care industry remain brisk, Frazier said he's not interested in making a major deal.
“I've been very clear that I'm not in favor of a very large, sort of consolidation-type merger,” he said. “But putting that aside, we look across the whole spectrum of opportunities where we think we can create value, and the value we seek to create is the value in the laboratories.”
Frazier declined to say what new therapies Merck is interested in pursuing, though he pointed out that it's one of the only remaining U.S.-based drugmakers producing vaccines. He also cited Merck's research in developing ways to address antibiotic resistance, where he sees opportunities for the company.
Frazier has said in the past that Merck wasn't interested in pursuing a tax inversion, and on Thursday he said he hopes the incoming Trump administration will enact policies that discourage companies from moving their headquarters overseas to cut their taxes.
“It will level the playing field more between U.S.-based companies and their ex-U.S. competitors,” he said. “It sounds like this administration is really focused on doing comprehensive tax reform, including comprehensive corporate tax reform, and I'm very hopeful it will eliminate the incentives for companies to do inversions. Because the U.S. tax regime was no longer globally competitive.”
To contact the reporter on this story: Jared S. Hopkins in New York at jhopkins38@bloomberg.net. To contact the editors responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net, Stephen West, John Lauerman
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