Pricing & Commercialization

Pricing & Commercialization

We are working to find new ways to bring our medicines and vaccines to more people around the world than ever before, and to make them as accessible and affordable as possible for the patients who need them.

Resources

 

To that end, we strive to commercialize our products in a way that both develops our business and meets local needs in a responsible and efficient manner.

OUR COMMITMENTS

  • We will price our products through differential pricing frameworks, taking into consideration the level of economic development, the distribution channel and the public health need
  • Across and within countries, we will seek to identify innovative and sustainable strategies for differential pricing or other commercial approaches that allow for greater flexibility to better reach at-need segments, pursuing partnerships with private, government or nonprofit resources and distribution channels
  • We will evaluate and address public health needs by working with local health care providers globally to increase knowledge of product need and use; we will invest in activities to improve patient awareness and education

In many countries, public and private health insurance plans are able to negotiate significant rebates and discounts with pharmaceutical manufacturers that enable patients to obtain health care and medicines at competitive prices.

We have differential pricing for 42 of our products, and 125 countries have implemented inter- or intra-country pricing for at least one of them.

We recognize that in developing-world markets, access to and funding for health care can be limited. Therefore, we develop and support various sustainable strategies to improve access, including directing differential pricing to patient sub-segments. Currently, we have differential pricing for 42 of our products, and 125 countries have implemented inter- or intra-country pricing for at least one of our products. As an example, initiatives expanding innovative concession program offers for our women’s health product portfolios in low- and middle-income markets demonstrate our commitment to differential pricing. We remain committed to continued growth in identifying and implementing opportunities to support access through differential pricing.

In developing-world markets, our pricing strategies include directing differential pricing to at-need patient sub-segments, either directly through national or local programs or indirectly through third-party health care funding sources that demonstrate reasonable and secure product distribution to intended patient segments and subject to applicable legal requirements.

For example, we are engaged with stakeholders within the family planning community, including the United Nations Population Fund (UNFP), Marie Stopes International (MSI), Population Services International (PSI) and the United States Agency for International Development (USAID), to support advocacy of the “Total Market Approach (TMA)” in key markets to help governments better target subsidized products, help the public sector focus on the poorest segments of the population, increase the ability of the private sector to serve middle-income tiers of the population, and decrease overall donor funding dependency. TMA leverages market efficiencies, helps expand equitable access and encourages intra-country price tiers based on economic population segments.

We believe that providing support through grants to third-party medical, scientific and patient organizations is an important way to advance mutual objectives to improve health and advance patient care. We have robust standards and policies in place to ensure that our grants support a full range of research and activities important to health care improvement. Learn more.

We will continue to champion innovative programs and partnerships to help increase the availability and accessibility of our medicines and vaccines for those who need them.

Pricing and Access

We understand that patients are having a harder and harder time affording their health care, including their prescription medicines.

After all, we’re patients too. That’s why we are committed to doing our part to help more patients obtain and afford the medicines and vaccines they need.

In keeping with George W. Merck’s timeless wisdom that “medicine is for the people,” we price our products to support access for patients today while also promoting the critical investments that will empower our scientists to invent the cures and treatments of tomorrow.

We approach pricing from the perspective of value. This approach looks at the value that a medicine provides through multiple lenses with the goal of reflecting its benefit to patients and to society, while at the same time paying an appropriate return on invested capital to our shareholders, to ensure that we are able to sustain R&D.

While each individual situation varies based on factual circumstances and market dynamics, generally, we consider:

  • Value provided to patients
  • Value provided to health care systems
  • Unmet need
  • Access
  • R&D sustainability
  • Competition

We have a long history of making our medicines and vaccines accessible and affordable through responsible pricing practices and industry-leading patient access programs. We are proud of the progress we have made to date and remain focused on responsible and sustainable pricing of our medicines moving forward.

As part of our commitment to transparency, in 2017 we started disclosing information on our Corporate Responsibility website about the price of medicines across our portfolio in the U.S. through our U.S. Pricing Transparency Report.

As health care systems in many developed markets are moving to a value-based care model, we are working with payers and other stakeholders to find flexible approaches to pricing. These include the use of quality- and performance-based contracts where payment is linked to quality metrics or improved health outcomes.

Performance

PRICING & COMMERCIALIZATION2013 2014 2015 2016 2017
Number of products that are supported with differential pricing1, 224 35 35 40 42
Number of countries where inter- and/or intra-country pricing has been implemented370 114 121 123 125
Investment in patient- and provider-education programs (in millions)$61$52$80$80$90
NOTE: We have realized a notable increase in both products (+46%) and geographic scope (+63%) supported with differentiated pricing intended for at-need populations. Year-over-year differential pricing performance metrics can be impacted based on the timing of local-market or third-party contract renewals and/or product life-cycle introductions or deletions. Therefore, increases or decreases in these pricing metrics should not be interpreted as anticipating the level of trend growth in future years.
1. Differential pricing intended to facilitate access for the at-need population.
2. Products include HIV treatments, vaccines and other patented products.
3. Countries as defined by the World Bank 2017 GNI Classification, including UN-defined Least Developed Countries.