Is Merck Really Too Shy to Raise Drug Prices?21st June 2019
That’s what the Washington Post told readers in reference to the drug BCG, a treatment for early stage bladder cancer. According to the Post article, there is now a worldwide shortage of BCG. The reason is that the manufacturer, Merck, is producing at the capacity of its manufacturing facility, but the current price does not justify the expenditures associated with building a new facility. The piece tells us that Merck doesn’t want to raise the price because it is worried that it will be seen like Martin Shkreli, who raised the price on single source generic drugs by more than 5000 percent. (BCG is now off patent and available as a generic.)
While it is possible that Merck really fears that its public relations people are so incredibly inept that they would not be able to make the distinction between price increases to cover manufacturing costs and price increases to gouge consumers, it is also possible that Merck thought it would be good to create a shortage of a drug needed to treat a potentially fatal disease in order to support the case for higher drug prices.
The Post article doesn’t give us a basis for assessing this alternative explanation. In fact, it never mentions the alternative explanation. This suggests that if the alternative explanation is in fact the true one (i.e. Merck wanted to create a shortage to create more public support for high drug prices), then Merck has been effective in advancing its goals.
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