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Pricing, production and distribution

Our pharmaceutical pricing approach helps us recover research, development, manufacturing, regulatory, distribution, and other costs incurred by the company in bringing its products to market, in order to ensure a sustainable supply of products for future generations of patients. This process enables us to continue investing in the discovery and development of new medicines. Recognizing the importance of affordable access to medicines in developing countries, we adapt pricing through flexible, differentiated pricing and product donations.

Pricing

Merck KGaA, Darmstadt, Germany reviews its pricing on a regular basis to ensure that our products are competitive and also accessible. In addition, Merck KGaA, Darmstadt, Germany supports a zero import duty approach, as advocated by WHO, as import duties constitute a large portion of the price of medicines in many countries.

Merck KGaA, Darmstadt, Germany regularly bids in government tender processes in developing countries in order to provide medicines at affordable prices. We offer products to governments at reduced rates in Africa, Latin America, and Southeast Asia. Such products include metformin (active ingredient to treat diabetes) via state-funded pharmacies (Farmácia Popular) in Brazil as well as the social health insurancee system in Mexico and in Guatemala; Euthyrox® (to treat thyroid diseases) via the social health insurance fund in Costa Rica and the national health system in Cuba; cefixime (an antibiotic) via the health authorities in South Africa; Concor®, Concor Cor®, Glucophage®, Glucophage XR®, Glucovance® (for diabetes), Thyrosol®, and Levothyrox® (for thyroid diseases) in government hospital tenders through the official local distributor in Vietnam; and Concor, Euthyrox, and Glucovance via the Ministry of Health in Malaysia.

Merck KGaA, Darmstadt, Germany’s portfolio has more than 80 products that are on the WHO Essential Medicines List . They are currently distributed in 65 developing countries including 34 countries in Africa, 19 in Asia and 8 in Latin America. These products are available in around half of the least developed countries (LDCs) such as Afghanistan, Benin, Burkina Faso, Ethiopia, Haiti, Mali, Senegal, and Sudan. The prices are determined by our legal entities, taking local purchasing power into consideration.

In order to improve access to high-quality, affordable diabetes treatment for low-income segments of the population, Merck KGaA, Darmstadt, Germany is developing a dual pricing strategy for Glucophage (active ingredient: metformin) in West Africa.

Local manufacturing

Merck KGaA, Darmstadt, Germany believes that local manufacturing in developing health care systems is appropriate for particular products. Local manufacturing and the transfer of technology, skills and intellectual property are contingent on compliance with our quality and safety standards. All our products, whether for developed or developing markets, are produced in manufacturing plants that meet Good Manufacturing Practices (GMPs ).

A number of treatments for chronic diseases are manufactured at production plants located in countries such as India, Pakistan and Indonesia. The medicines are marketed in the country of manufacture and exported to developing countries such as Afghanistan, Maldives, Sri Lanka, Nepal and Kenya. We export products manufactured in Pakistan and India to a number of African countries through our legal entities in South Africa and Tunisia. Our production plant in Indonesia supplies developing health care systems across Southeast Asia.

Through our qualification program for our contract manufacturers, we support them in developing their own quality system by offering coaching or consultation services, as needed. We are currently working with a partner in Algeria that handles the packaging of Glucophage for local distribution. Merck KGaA, Darmstadt, Germany intends to further develop this local partner so that they can perform other steps along the value chain on our behalf.

Product approval and distribution

When deciding which products to submit for approval in which countries, we take our patients’ needs for our products into consideration.

Merck KGaA, Darmstadt, Germany continuously works to guarantee product availability for its customers. Our requirements for the quality and effectiveness of the distribution process are uniform worldwide. We are committed to performing rigorous and frequent checks on our distribution network to ensure that partners are adhering to our quality and safety requirements and to ensure full compliance with global Good Distribution Practices (GDPs).

Global Drug Safety is responsible for continuously, systematically monitoring the safety of our drugs (pharmacovigilance). Pharmacovigilance information is compiled from doctors and patients in all countries in which our products are marketed. Medical specialists and pharmacovigilance teams ensure that information on adverse affects is correctly compiled, tracked, and communicated. The data for all of our drugs are evaluated centrally by Global Drug Safety, and risk-benefit evaluations are adapted where necessary. In line with regulatory requirements, changes to the risk-benefit evaluation and potential safety risks are reported to the responsible authorities, as well as to doctors and patients.

In 2011 and 2012, Merck KGaA, Darmstadt, Germany worked with local key players to develop and implement good pharmacovigilance practices in northwestern Africa. We collaborated with pharmaceutical regulatory authorities (the National Centre of Pharmacovigilance in Tunis) to align their national regulations with the EU pharmacovigilance directives.

Product safety and anti-counterfeit measures

To protect patients, Merck KGaA, Darmstadt, Germany supports initiatives to fight counterfeit products. In this regard, we are involved in organizations (VFA, EFPIA, and IFPMA), support industry-wide initiatives, and collaborate closely with the responsible authorities at a national, regional and international level. A special focus is on our collaboration with the Pharmaceutical Security Institute  (PSI), an organization dedicated to protecting public health, improving the exchange of information on counterfeit medicines, and initiating enforcement actions against product counterfeiters.

Our Anti-Counterfeiting Operational Network (MACON) consists of experts from various parts of the company such Legal/Trademarks, Product Security, Export Control, Supply Chain, and Quality Assurance. Managed by Corporate Security, this network is responsible for monitoring and implementing anti-counterfeiting measures for all products worldwide.

We utilize innovative solutions to help our customers and patients determine the identity and authenticity of a pharmaceutical product themselves. One example is the Mobile Anti-counterfeiting System (MAS) in Nigeria, an identification system operated via mobile phone. After texting the scratched bar code encrypted on the package, patients receive a text message regarding the authenticity of the drug. In addition to this, we support the non-profit Global Pharma Health Fund, which offers the GPHF Minilab. This is a portable, compact quality analysis kit enabling the detection of substandard and counterfeit medicines.

DISCLAIMER

Publication of Merck KGaA, Darmstadt, Germany.

In the United States and Canada the subsidiaries of Merck KGaA, Darmstadt, Germany operate under the umbrella brand EMD.

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