Merck & Co. predicts Keytruda will undergo IRA price cuts before patent cliff
Here are the key details about Merck's predictions for Keytruda regarding IRA price cuts and its patent cliff:
IRA Price Cuts
- Merck expects Keytruda to be selected for "government price setting" under the Inflation Reduction Act (IRA) in 202614.
- The negotiated prices would then take effect in January 202814.
- Merck predicts U.S. sales of Keytruda will decline after the IRA price cuts become effective in 20281.
Patent Cliff
- Keytruda faces a key patent expiration in 2028310.
- This coincides with when the IRA price cuts are expected to take effect.
- The patent expiration will open up opportunities for biosimilar competition2.
Impact on Sales
- Keytruda is Merck's top-selling drug, generating $29 billion in sales in 20241.
- Analyst forecasts predict Keytruda sales will drop 19% from $33.7 billion in 2028 to $27.4 billion in 2029 due to patent expiration2.
- The combined effect of IRA price cuts and patent expiration in 2028 is expected to significantly impact Keytruda's U.S. sales1.
Merck's Response
- Merck is focused on business development deals to help offset Keytruda's expected sales decline3.
- The company is developing a subcutaneous formulation of Keytruda to help extend its market position3.
- Merck is also building a pipeline of early-stage assets to strengthen its immunotherapy portfolio2.
Merck faces a challenging period ahead as its blockbuster drug Keytruda encounters both government-mandated price cuts and loss of patent protection in 2028. The company is actively working to mitigate the impact through various strategies, but expects a significant decline in Keytruda's U.S. sales after 2028.
Sources:
1. https://www.fiercepharma.com/pharma/merck-expects-keytruda-fall-ira-price-cuts-2028
2. https://www.pharmaceutical-technology.com/news/keytruda-remains-merck-cos-biggest-2023-success-story-as-patent-expiry-looms/
3. https://www.biospace.com/business/5-pharma-powerhouses-facing-massive-patent-cliffs-and-what-theyre-doing-about-it
4. https://endpts.com/merck-says-keytruda-could-be-up-next-for-ira-price-cuts/
10. https://www.biopharmadive.com/news/merck-dealmaking-15-billion-keytruda-cliff-davis/706309/