Merck KGaA, Darmstadt, Germany is committed to ensuring that patients have access to the best possible medicines. This requires optimal pricing, reimbursement, and access conditions for all of our in-line and future pipeline products. Across the world, the healthcare industry is undergoing a unique transformation: National and regional institutions and authorities, which decide on price-dependent market access and reimbursement in many markets, hold a growing role as key stakeholders, together with healthcare professionals, politicians, regulators, patients, and distributors. We are fully determined to continue succeeding in this changing environment.
We believe that the prices of our medicines should reflect their overall value, to include benefits to patients, healthcare systems and payers alike. Value reflects both individual clinical outcomes as well as impact on overall treatment, health system delivery and patient adherence.
To meet the needs of patients, our health solutions must be affordable and accessible. In terms of organizational setup, our Group Market Access and Pricing unit reports directly to the Chief Marketing and Strategy Officer of our Healthcare business sector and sets initial prices in collaboration with Merck KGaA, Darmstadt, Germany’s individual businesses. Our subsidiaries are responsible for adapting and managing prices at the local level.
Innovative pricing models
We recognize the importance of fairly priced medicines and the fact that individual countries have varying abilities to pay for health solutions. Within a country, too, there are often significant regional and/or socioeconomic differences. We therefore partner with governments and other key stakeholders to develop individual pricing and contracting models. In addition, we continuously monitor the dynamic healthcare environments, pricing & reimbursement systems, guidelines, and policies, adjusting our prices as necessary.
We support product donations, flexible pricing, differential pricing, and post-patent competition between reference products and generics. We conduct yearly reviews of our pricing strategies to identify ways to continually expand access to health by aligning prices with affordability.
We have developed several product- and market-specific alternative reimbursement and contracting models (ACMs) with payers such as health insurance companies to provide the right patients with prompt access to our innovations. Examples of such ACMs include outcome-based and budget capitation agreements for Erbitux® as well as adherence-based payment agreements for Rebif® and Saizen® in its easypodTM injection device.
We also regularly participate in government tenders for products used in public hospitals serving low-income patients. Beyond this, we have established second “lower-price” brands of existing products. In South Africa, for example, second brands of Concor® and Ziak® (antihypertensive agents) are available at discounted prices.
Low- and middle-income countries
We recognize the importance of affordable access to medicines in low-and middle-income countries. As a result, we are committed to pricing our products responsibly and take part in innovative equitable pricing schemes in partnership with governments and other key stakeholders. In developing countries, we also regularly participate in government tenders. In this way, we’re already supplying products to governments at reduced prices in Africa, Latin America, the Middle East, and Asia.
Different kinds of patient support enable us to offer products at a more affordable cost. Our Erbitux® China Patients Assistance Program is a prime example of such an initiative. Our Patient Support Program Policy describes our uniform standards for such efforts.
Operational pricing and strategic price decisions
In 2016 we implemented a new Group-wide price management system. This global platform enables us to drive strategic price and reimbursement decisions and contains all information needed to set, modify and approve country-specific prices. It also serves as an analysis tool that enables us to make informed strategic pricing decisions.
Improved access to the oncology drug Erbitux®
In China, we are working with the China Charity Federation (CCF) to expand access to our oncology drug Erbitux®, which is used to treat conditions such as colorectal cancer. For patients with a good prognosis, the Erbitux China Patients Assistance Program (ECPAP) will cover the majority of the costs for Erbitux® treatment. In addition to helping with costs, we also offer free services such as providing information on this disease, or ensuring that the medicine remains properly refrigerated until reaching patients. From the program’s launch in 2011 to the end of October 2016, 6,800 patients had already benefited from ECPAP.
We also run similar programs in other countries such as India, where we likewise offer Erbitux® for the treatment of colorectal and head & neck cancer at reduced prices. Since 2014, this initiative has helped 1,725 patients. In South Africa, we support the Savanti Patient Access Program, which enables patients to be treated with Erbitux at a lower co-payment.