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Merck & Co. details drug pricing practices for US

Merck & Co. Inc. disclosed pricing practices for its branded drugs and vaccines in the U.S. market.

The company has increased prices but its approach has been responsible, Adam Schechter, president of global human health, said in a post on the company's website. He also mentioned that Merck's average net price increase across its portfolio each year has been in the low to mid-single digits, specifically in the range of 3.4% to 6.2%.

The net price change observed in both 2015 and 2016 was 5.5%. In 2016, the company's gross U.S. sales were reduced by 40.9% due to rebates, discounts and returns. Meanwhile, the average list price increases at the company have been at or below 10.5% since 2010.

Schechter also stated that Merck has taken a close look at its pricing practices and believes that it has a good track record. He noted that the company's average discount rate has been increasing at a steady rate.

In addition, Schechter said the company is incorporating biomarkers into clinical studies, which would help identify the right medicine for the right patient. Merck is also exploring alternative pricing and contracting arrangements by entering into value-based contracts with payers.

Schechter said the company's R&D expenses between 2010 and 2016 were more than $50 billion. He added that the company would continue to invest in R&D to fight diseases such as Alzheimer's, cancer and infectious diseases.