MRK · 10-Q · 2026Q2 · Full report

Pricing and Market Access

Merck & Co., Inc. · 2026-08-07 · Importance 40 · Surprise 42 · In source text

Merck reported worldwide pricing pressure from health-care cost containment, including U.S. Medicaid rebates, increased 340B utilization, and Medicare price-setting under the Inflation Reduction Act. Government-set pricing for Januvia became effective January 1, 2026, while Janumet and Janumet XR prices become effective January 1, 2027, and Lenvima pricing becomes effective January 1, 2028. Merck expects Keytruda to be selected for government price setting in 2027, potentially effective January 1, 2029, and said private-market pricing could also be negatively affected. Germany’s GKV-BStabG law, approved in July 2026, introduces pharmaceutical cost-containment provisions primarily effective January 1, 2027, which Merck expects will exert significant downward pressure on German sales. Januvia and Janumet sales declined 31% in the second quarter and 29% in the first six months, partly because of lower net pricing and competitive pressure.

Key facts

• Merck pays a royalty of 2.5% on worldwide net sales of Keytruda under a significant license agreement; this royalty will continue through 2026 and terminate thereafter. source
• Merck signed an agreement with CMS in June 2026 to participate in the GENERating cost Reductions fOr U.S. Medicaid (GENEROUS) Model. source
• The Company expects that Keytruda will be selected in 2027 for government price setting, which would become effective on January 1, 2029; a pending CMS proposed rule may subject Keytruda Qlex to price setting at the same time. source
• The Inflation Reduction Act (IRA) created financial penalties for drugs whose prices rise faster than inflation, redesigned Medicare Part D requiring manufacturers to bear more liability (which went into effect in 2025), implemented government price-setting for certain Part D drugs (went into effect in 2026) and will implement government price-setting for certain Part B drugs starting in 2028. source
• CMS selected Januvia (sitagliptin) in 2023 for the first year of the IRA Drug Price Negotiation Program, and selected Janumet and Janumet XR in 2025 for the second year; the government set a price for Januvia effective January 1, 2026 and set prices for Janumet and Janumet XR which will become effective January 1, 2027. source
• HHS announced Lenvima (lenvatinib) has been selected for government price setting with the set price becoming effective January 1, 2028. source
• Merck entered into a three-year MFN Agreement with the U.S. government in December 2025 and agreed to provide Januvia, Janumet and Janumet XR through a direct-to-patient program at affordable prices for eligible U.S. patients and to expand the program to include Lipfendra in the future. source
• Global efforts toward health care cost containment continue to exert pressure on product pricing and market access worldwide, and changes to the U.S. health care system as part of health care reform have contributed to pricing pressure. source

Impact estimates