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 U.S. President Donald Trump said last year that one way his
administration would seek to lower drug costs to consumers could be
through an international pricing index (IPI) that would determine
what Medicare pays for certain medicines based on the prices set in
a handful of other countries. A proposed version of the rule is
expected in August.
Other developed nations with single payer systems typically pay far
less for drugs than the United States, which Trump called "global
freeloading."
"I think there will be challenges to the rule," Frazier told
reporters following the drugmaker's investor day in New York. "A lot
of people have objections to that rule. It's not just pharmaceutical
companies."
Frazier, a lawyer by trade, did not say whether Merck would launch
its own legal challenge to the proposed rule.
The company was one of three U.S. drugmakers that sued the U.S.
Department of Health and Human Services this week over a new
government regulation requiring them to disclose the list price of
prescription drugs in direct-to-consumer television advertisements.
Of the Trump administration proposals to lower drug costs, the IPI
option is the one Frazier said most concerns him, due to the effect
importing price controls from other countries might have on
innovation and patient access in the United States.
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"We tell incomplete stories about those markets," Frazier said,
noting that some countries ration treatments available to patients.
He pointed to lower survival rates for lung cancer in Britain, which
has an agency that can bar the use of approved new medicines based
on their cost.
Earlier on Thursday, Merck executives touted the company's pipeline
of experimental drugs beyond its blockbuster cancer treatment
Keytruda.
The investor event was also an opportunity for Merck to showcase
executives other than Frazier, who turns 65 in December. Last year,
the company scrapped its mandatory retirement age of 65 for its CEO,
saying it gave the board flexibility around finding his successor.
"I'm extremely pleased by the breadth of the leadership talent at
the company," Frazier said in response to a question about
succession. "I know that the board feels the same way. And they will
continue to look at when the right opportunity is ... to make a
selection."
(Reporting by Michael Erman; Editing by Bill Berkrot)
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