RE:RE:Merck USA (MSD) acquires Phase 2 biotech for US$ 10.8 Bln. August 01, 2023 - While Merck has been focused on expanding its business by 2028—the year Keytruda loses its exclusivity—another date now looming is 2026. That’s when the Inflation Reduction Act will allow Medicare to negotiate prices for the drugs on which it spends the most, with Keytruda at the top of the list.
On Tuesday, Davis called the negotiation measure “unconstitutional price setting.” The company is one of four that have filed lawsuits against the government, challenging the legality of the IRA.
“We’ll take it through District Court and if need be, Circuit Court and ultimately to the Supreme Court,” Davis said. “This will take a while to play out. What I do think is highly likely is that we will be able to see this result by the time we get into the 2026 timeframe.”
Win or lose, Merck will eventually have to deal with the loss of Keytruda revenues, leaving M&A as the top solution, especially considering the company’s firepower.
“We believe Merck is actively looking to use its strong cash position to make acquisitions to boost growth,” Edward Jones analyst John Boylan wrote in a note to investors.