Merck CEO on Winrevair Approval, Obesity Drug, Health Costs

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Bloomberg Mar 29 02:39 · 6418 Views

Merck Chair and CEO Robert M. Davis discusses the US approval of Winrevair, a new treatment for a rare, dangerous form of high blood pressure. Speaking on Bloomberg Television, Davis also comments on Merck's development of an obesity-fighting drug and health-care costs. (Video edited to remove incorrect graphic.)

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Transcript

  • 00:00 Can we talk about that approval yesterday?
  • 00:02 How much of A breakthrough
  • 00:03 is this,
  • 00:04 You know, this is really
  • 00:06 we think something special.
  • 00:07 The the disease we we are hopefully able now to really make a difference in is pulmonary
  • 00:12 arterial hypertension.
  • 00:13 And this is a rare disease.
  • 00:15 It's not
  • 00:16 a well known disease, but it's a devastating disease.
  • 00:19 You know this is a disease that primarily effects women in the prime of life age 30 to 60
  • 00:24 mortality rates of 43% in five years.
  • 00:27 So you can imagine
  • 00:29 impact not only to the patient but to the family
  • 00:32 of people who otherwise are in the prime of life is is really
  • 00:36 tragic
  • 00:37 thankfully and hopefully we'll make a difference in that.
  • 00:40 This drug now we're bringing forward, it's called Wynrevir
  • 00:44 is a biologic, it's a first in class medicine.
  • 00:46 It's a new mechanism of action called a
  • 00:49 active in signaling inhibitor.
  • 00:51 And what it actually does is potentially remodels the blood vessels, your arterial vessels
  • 00:56 that allows them to open up because what pH does it causes your blood vessels in your in your lungs
  • 01:01 to to thicken and narrow which ultimately leads to
  • 01:05 heart disease.
  • 01:05 How often do you take this?
  • 01:06 Every three weeks, How does this work?
  • 01:08 Yeah, so it's a three-week subcutaneous injection can be done by the patient or caregiver.
  • 01:14 And so this would be something you would administer.
  • 01:16 We expect most people do in home.
  • 01:19 I wish we could go into a whole segment about how you come up with these names when Vera Key, Trudeau, we can do that another time.
  • 01:23 I do want to get a sense though of this whole idea of how you got into this through an acquisition
  • 01:29 to partner with someone and then what the importance is
  • 01:32 of looking beyond some of the mainstays like cancer.
  • 01:34 It's sort of that diversity that we were just hearing about.
  • 01:37 Yeah.
  • 01:37 Well, you know obviously
  • 01:39 we are a science LED, science driven company and and this came about because
  • 01:44 we were already starting to look into this space.
  • 01:47 So our our cardiovascular teams within Merck were doing work in this space.
  • 01:51 When they saw the data from a company called Exceleron
  • 01:54 that had this, this asset,
  • 01:56 they came to me and said, you know we're excited.
  • 01:59 This can be a difference maker and that's why we moved
  • 02:03 on this and it really now is a foundational
  • 02:06 element in our broader cardiovascular and cardio metabolic portfolio.
  • 02:10 So
  • 02:10 it is one where we see the value of diversification.
  • 02:13 Obviously we're a leader in oncology, we're a leader in vaccines, we're increasingly moving into immunology
  • 02:18 and and this move into cardio metabolic space which is significant for us.
  • 02:22 There are a lot of people who are listening who invest increasingly in healthcare
  • 02:26 and all they want to hear about is what's your solution for weight loss because that's really the reason why so many people have gone into the healthcare stocks and into the industry.
  • 02:33 You are working on a GLP one type of drug,
  • 02:36 but that's not for weight loss, it's for fatty liver.
  • 02:39 Why are you approaching this differently and not necessarily directed at the weight loss itself and more on some of the illness that potentially
  • 02:46 some of the
  • 02:48 some of it can cause?
  • 02:49 Yeah, well so the the, the,
  • 02:50 the mechanism you're talking about, we have a GL P1 Glucagon dual agonist and and this is important because while it brings weight loss benefits frankly similar to what you'd see with Ozempic,
  • 03:02 our primary focus as you point out is fatty liver disease which
  • 03:05 is a really a, a an untreated area today.
  • 03:08 And our view of this space is obesity is important, but increasingly
  • 03:13 it's the comorbidities around obesity.
  • 03:15 It's you know, it's heart disease,
  • 03:17 it's diabetes, it's, it's liver disease.
  • 03:20 And so if we can affect those and bring outcomes that benefit patients clinically there
  • 03:25 they get the weight benefit.
  • 03:26 But then as you think about reimbursement,
  • 03:28 as you think about value, that's where the value comes to society because actually we're we're making people more healthy than just losing weight.
  • 03:36 Is this mostly
  • 03:37 a coverage play
  • 03:39 Essentially it's easier for this to get reimbursed and and and
  • 03:42 insured
  • 03:43 and that's one reason why if you gear it at some of the illnesses,
  • 03:47 you won't have to get into the whole debate that's percolating elsewhere.
  • 03:49 Yeah.
  • 03:50 Well, again, you know from from a Merck perspective, it starts with
  • 03:54 the patient at the center.
  • 03:55 So we see this as a disease that needs to be dealt with.
  • 03:58 But yes, I think the benefit of this
  • 04:00 is
  • 04:01 if you can show outcome,
  • 04:03 if you can show that there's something beyond just
  • 04:06 weight loss, then your ability to be in reimbursed and the ability to show value to society is, is is different, it will be different.
  • 04:12 But to your point, if obesity leads to so many other health issues, at some point will insurance, the government even be able to put this under their plans?
  • 04:20 We would expect so yes, for sure.
  • 04:23 And I think you're already starting to see that that start to shift and it will be
  • 04:26 the outcomes driven approaches that drive that
  • 04:29 for sure.
  • 04:30 We started this conversation by talking about this new drug that you've developed, got approval stock runaway high.
  • 04:35 Yesterday
  • 04:35 I was going through the cost, so the cost could be about $242,000 a year.
  • 04:40 I've always struggled with this.
  • 04:41 And I want you to explain to me why is it so much more expensive in America compared to, say, the prices that I see for drugs abroad in Europe, in the UK?
  • 04:48 What explains that difference?
  • 04:49 Yeah, well, you know, it's it's hard to do an apples to apples comparison.
  • 04:52 If you look at what
  • 04:54 drugs are as a percentage of total health care spend in the United States, they run about 14 to 15.
  • 05:00 Percent,
  • 05:00 if you look across Europe, for instance, it's about the same, It's about 12 to 13%.
  • 05:05 So the reality of it is that healthcare as a total
  • 05:08 area, not just drugs in the United States, is more expensive.
  • 05:12 The percentage of cost of drugs in the United States is equal to what it is outside the United States.
  • 05:17 So it's hard to just take one element of the healthcare system and say let's focus on it, not understanding the broader questions.
  • 05:24 You know, if you're in the United States, the thing we benefit from,
  • 05:26 you get the fastest access,
  • 05:29 you get the most access to the most innovative medicine
  • 05:32 driven by an industry that is
  • 05:35 based here in the United States
  • 05:37 and exports to the world,
  • 05:38 you know, So
  • 05:39 we need to look at the totality of what we see as really three elements.
  • 05:44 You have to think about access,
  • 05:46 affordability,
  • 05:47 but then also making sure you're protecting the innovation ecosystem that that we value in this country.