Throughout the world, healthcare costs are rising for a variety of reasons; chief among them are greater utilization and complexity of services and technologies that convert once-fatal diseases into chronic conditions.
As populations continue to age in the developed world, and better health technologies and pharmaceuticals improve health and prolong life, payers are increasingly focusing on pharmaceutical spending in their overall healthcare budgets.
The pharmaceutical industry is faced with a variety of healthcare systems and government policies in developed countries, where it must balance patient access to the best treatments with the constraint of limited budgets. For example, in most European countries and in Canada, the government both regulates healthcare and provides it to its citizens. We understand these management and budgetary pressures.
Despite differences in national approaches, we price our products in all OECD (Organisation for Economic Co-operation and Development) countries to foster access while ensuring a reasonable return on our investment (ROI). A sustainable ROI supports Merck’s future funding of innovative drugs and vaccines that can help address unmet medical needs that currently exist throughout the world and benefit patients.
Our prices around the world are determined by several factors, including the value of our products to patients, payers and physicians relative to competitor products; the ability and willingness of various customers—including national, regional or local institutional payers, physicians, employers and patients—to pay for our products; and the cost and value of other treatment options, such as hospitalization. The prices of our medicines and vaccines also reflect government regulation and currency fluctuation effects.
While striving to maintain a consistent global approach, Merck also considers the national, competitive and regulatory conditions in each market individually. It is important to recognize that the price a consumer pays is also affected by duties and tariffs imposed on imported medicines and vaccines, as well as price markups by intermediaries, including wholesalers and pharmacies.
Given the choices available within a class of drugs today, powerful and sometimes monopolistic buyers in the pharmaceutical marketplace—particularly governments and national health systems—have intensified pricing pressure throughout the developed world. In price-controlled environments (particularly prevalent in Europe), most governments use international price comparisons and therapeutic reference pricing as levers to set their own purchasing price. In addition, in a growing number of markets worldwide, decisions about medicines are increasingly being relegated to regional payers, making the challenge of ensuring access to new treatments extend beyond national price or reimbursement setting alone.
In the private sector, particularly in developed countries like the United States, price competition has been spurred by private health insurance plans. These payers are able to negotiate significant rebates and discounts with pharmaceutical manufacturers, based on their ability to direct utilization. Where competition exists among health insurance plans, patients are able not only to obtain healthcare and their medicines at competitive prices but also to take advantage of innovative pharmacy services that have improved the quality of pharmacy care.
In developing-world markets, Merck recognizes that access and funding for health care, particularly for pharmaceuticals, can often be limited. In many of these markets, most or all of the cost of treatment is borne by the patient. Merck actively works to develop and support various sustainable strategies to improve access, particularly for economically at-risk patient segments. In terms of pricing, these strategies can include directing differential pricing to needy patient sub-segments, either directly through national or local programs or indirectly through third-party healthcare funding sources that demonstrate reasonable and secure product distribution to intended patient segments.
Our willingness to provide differential pricing strategies is evident for many of our products, including some of our best-in-class innovative brands in our HIV, women’s health and vaccine franchise areas. For example, in May 2013 Merck and a group of partners announced an agreement in which we will reduce the cost of IMPLANON® (etonogestrel implant) for millions of women in some of the world’s poorest countries to improve their access to contraceptives. Click here for more information. Merck is committed to continuing its efforts to develop commercial access program solutions, including flexible pricing programs, targeted as appropriate to address cost burden for patients at need throughout the world.
|Products for which we have access pricing1,2||19||19|
|Countries where at least one product has intra-country pricing of public and private sectors3||49||49|
|1 Differential pricing intended to facilitate access for the at-need population
2 The number of products for which we have access pricing for 2011 has been revised to correct an error in our reporting
3 Countries with an MSD trading entity
To learn more about our product pricing, click on one of the links below:
Last Updated August 14, 2013