Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Nyse  >  Merck & Co., Inc.    MRK

MERCK & CO., INC.

(MRK)
  Report
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsPress ReleasesOfficial PublicationsSector newsMarketScreener StrategiesAnalyst Recommendations

Canada enacts drug price crackdown, in blow to pharmaceutical industry

share with twitter share with LinkedIn share with facebook
08/09/2019 | 04:12pm EDT
A pharmacist counts prescription drugs at the at the CentreTown Pharmacy in Ottawa

TORONTO (Reuters) - The Canadian government announced final regulations on Friday that should cut billions of dollars from patented drug prices that are among the highest in the world, overcoming heavy opposition from pharmaceutical companies who may eventually challenge the new rules in court.

The biggest reform to Canada's drug price regime since 1987 would save Canadians C$13.2 billion ($10 billion) over a decade. The rules will save money for patients, employers and insurers including the government at the expense of drug company profits. They also could eventually cut the earnings of drugmakers in the United States, the world's largest pharmaceutical market.

The Canadian Life and Health Insurance Association called the regulations "a crucial step to lower prescription drug costs for all Canadians." The province of British Columbia also applauded the move, saying in a release: "People in B.C. and across Canada are now better protected against excessive drug prices set by manufacturers."

The new rules were largely in line with a December 2017 draft. They came after months of delay prompted speculation the government would back down in the face of industry lobbying or simply run out of time before Canada's October election.

"We are taking the biggest step in a generation to lower the price of drugs in Canada by moving forward with these regulations," Minister of Health Ginette Petitpas Taylor said in an interview.

Petitpas Taylor said the new rules would lay the foundation for a new national drug program. Prime Minister Justin Trudeau's government is expected to announce a program to cover the cost of prescription drugs for some or all Canadians, but the program's scope is not yet clear.

Canada will change the list of countries the federal drug price regulator, the Patented Medicine Prices Review Board (PMPRB), compares domestic prices to, dropping the United States and Switzerland where prices are highest. It will also let the agency consider cost-effectiveness of new medicines.

It will require drugmakers to disclose some confidential discounts to the PMPRB, which sets maximum prices.

Initially expected to take effect in January, the regulations were delayed so the government could review feedback. They will now go into force on July 1, 2020.

The new features of the regulations, which take into account cost-effectiveness of medicines and their impact on government budgets, apply only to drugs approved by Health Canada after the rules are officially published later this month. Changes in the list of comparison countries could affect prices for some drugs already on the market.

POTENTIAL FOR COURT CHALLENGE

Canada's approach to drug pricing is unusual. Rather than bargaining prices down, the PMPRB declares that some prices are an illegal abuse of patent rights.

Drugmakers base their list prices on the agency's published guidelines. When there is disagreement, PMPRB staff can challenge drugmakers at an internal tribunal. Most cases are settled, but appeals go to federal court and beyond.

In the past, drug companies have gone as far as the Supreme Court of Canada to challenge PMPRB guidelines. With new regulations come new guidelines, and the potential for fresh court challenges.

"We anticipate a considerable uptick in litigation, at least initially, as the industry patentees test the boundaries of the new regime," said Douglas Clark, executive director of the PMPRB, on a call with reporters. "That's to be expected any time you substantially change rules."

University of British Columbia professor Steve Morgan, who studies access to drugs and has advocated for a new national drug program, called the rules "a bold step forward".

"Now the tricky part: implementation, with all the specifics concerning how rules will apply; and, no doubt, legal challenges from industry," he wrote in a tweet.

REFORMS COULD AFFECT U.S. MARKET

Global drugmakers, including Johnson & Johnson, Merck & Co and Amgen Inc, argued against the draft plan.

While the government's focus is on reducing domestic patented drug prices that are among the highest in the world, the new policy could eventually have consequences south of the border.

The Trump administration in July said it would allow U.S. states and other groups to start pilot programs related to importing drugs from Canada. It has also said it may start determining what the U.S. government healthcare program Medicare pays for certain medicines based on prices in some other countries, including Canada.

Reuters reported in February that pharmaceutical lobby groups had tried to head off the Canadian reforms with an offer to give up C$8.6 billion in revenue over 10 years, freeze prices or reduce the cost of treating rare diseases.

Drugmakers argue the reforms could limit Canadians' access to new medicines.

"The industry does take a lot of risk on in creating these products. It does cost money," said Pamela Fralick, president of industry group Innovative Medicines Canada. "Our fear is that globally, decisions will be made that products will not be launched in Canada."

The government said many countries with lower prices have more pharmaceutical industry investment and access to drugs that meets or exceeds Canada's.

(Reporting by Allison Martell; editing by Denny Thomas, Nate Raymond and David Gregorio)

By Allison Martell

Stocks mentioned in the article
ChangeLast1st jan.
ACCESS CO., LTD. -2.63% 815 End-of-day quote.-14.66%
AMGEN INC. -1.52% 243.59 Delayed Quote.1.05%
BASE CO., LTD. 1.14% 4450 End-of-day quote.64.61%
BASE, INC. -1.27% 7000 End-of-day quote.298.86%
CHANGE INC. -0.22% 9280 End-of-day quote.219.12%
DRAFT INC. -1.43% 896 End-of-day quote.0.00%
JOHNSON & JOHNSON -0.09% 147.22 Delayed Quote.0.93%
JUST GROUP PLC 1.03% 45 Delayed Quote.-43.04%
MERCK & CO., INC. -1.05% 81.67 Delayed Quote.-10.20%
THE GLOBAL LTD. 6.88% 202 End-of-day quote.-57.11%
WILL GROUP, INC. 4.06% 564 End-of-day quote.-54.95%
WORLD CO., LTD. 5.00% 1303 End-of-day quote.-51.58%
share with twitter share with LinkedIn share with facebook
Latest news on MERCK & CO., INC.
08/04MERCK : and Hanmi Pharmaceutical Enter into Licensing Agreement to Develop Efino..
BU
08/03MERCK : Announces Second-Quarter 2020 Financial Results
AQ
08/03Gilead Shows the Dangers of Covid-19 Drug Mania -- Heard on the Street
DJ
08/03MERCK : Animal Health Completes Acquisition of Worldwide Rights to VECOXAN® Bran..
BU
07/31Apple, Merck rise; Caterpillar, Expedia fall
AQ
07/31Merck to move COVID-19 treatment into large trials, sees sales recovering thi..
RE
07/31MERCK & CO., INC. : Results of Operations and Financial Condition, Financial Sta..
AQ
07/31MERCK : Announces Two US Regulatory Milestones for KEYTRUDA in Triple-Negative B..
AQ
07/31MERCK : Expects Nearly $2 Billion Covid-19 Revenue Impact in 2020
DJ
07/31MERCK : 2Q Profit Rises Despite Lower Revenue
DJ
More news
Financials (USD)
Sales 2020 47 826 M - -
Net income 2020 12 096 M - -
Net Debt 2020 16 135 M - -
P/E ratio 2020 17,2x
Yield 2020 2,93%
Capitalization 206 B 206 B -
EV / Sales 2020 4,65x
EV / Sales 2021 4,26x
Nbr of Employees 71 000
Free-Float 70,5%
Chart MERCK & CO., INC.
Duration : Period :
Merck & Co., Inc. Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends MERCK & CO., INC.
Short TermMid-TermLong Term
TrendsBullishNeutralNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 20
Average target price 93,84 $
Last Close Price 81,67 $
Spread / Highest target 31,0%
Spread / Average Target 14,9%
Spread / Lowest Target -0,82%
EPS Revisions
Managers
NameTitle
Kenneth C. Frazier Chairman, President & Chief Executive Officer
Robert M. Davis CFO & Executive Vice President-Global Services
Sandy Tremps Vice President-R&D IT CIO
Thomas Henry Glocer Independent Director
Leslie A. Brun Lead Independent Director
Sector and Competitors
1st jan.Capitalization (M$)
MERCK & CO., INC.-10.20%206 143
JOHNSON & JOHNSON0.93%387 947
ROCHE HOLDING AG3.31%300 745
PFIZER, INC.-2.02%213 028
NOVARTIS AG-15.79%185 171
ABBVIE INC.6.49%169 079