Rebate Elimination Would Bring Drug Prices Down, Merck, Pfizer Chiefs Say

U.S. drug-list prices would come down if U.S. policy banned drug rebates, Merck & Co. (MRK) chief executive Kenneth Frazier and Pfizer chief executive Albert Bourla said Tuesday at a Senate hearing on drug prices.

Rebates are discounts negotiated to insurers and other middlemen behind the scenes. Drug makers argue that these rebates mean the prices they really get for their drugs, known as net prices, are much more modest than the public list prices.

Mr. Frazier said past efforts by Merck to lower its list prices put the company at a competitive disadvantage. He didn’t go into detail, but the implication is that Merck suffered because lower list prices meant it couldn’t offer the same level of rebates as its rivals. He said if the playing field were level, list prices would come down across the board.

The executives’ comments echoed an earlier statement by AstraZeneca PLC (AZN, AZN.LN) chief executive Pascal Soriot.

https://www.marketscreener.com/MERCK-AND-COMPANY-13611/news/Merck-and-Rebate-Elimination-Would-Bring-Drug-Prices-Down-Merck-Pfizer-Chiefs-Say-28072520/