Merck Strikes a Deal with US over Fertility Drug Costs

German pharmaceutical company Merck has reached an agreement with the US government to lower the cost of its fertility treatments in exchange for exemption from potential pharmaceutical tariffs. This agreement aims to make in-vitro fertilization (IVF) more accessible to American women.

Key Points

Merck's US subsidiary, EMD Serono, will significantly reduce the prices of its IVF treatments.
In return, EMD Serono's pharmaceutical products and ingredients will be exempt from potential US pharmaceutical tariffs under Section 232.
The price reductions could reach up to 84% for patients using a combination of Merck's fertility drugs.
The initiative will make Merck’s drugs available through the “TrumpRX” direct distribution program.
Merck will invest in biopharmaceutical production and research within the United States.
The US market is strategically important for Merck, accounting for a substantial portion of its global revenue.

Background

The agreement comes amid pressure from the Trump administration to lower drug prices in the United States, which are significantly higher than in Europe. President Trump has been vocal about his desire to make healthcare more affordable and has targeted the pharmaceutical industry to achieve this goal. In February, Trump signed an executive order aimed at expanding access to IVF and reducing treatment costs. IVF is a process where eggs and sperm are combined in a laboratory to create an embryo for couples struggling with infertility. The cost of IVF can range from $12,000 to$ 25,000 per cycle in the US, making it inaccessible to many. Other pharmaceutical companies like Astrazeneca and Pfizer have also previously reached agreements with the US government regarding drug pricing. Trump had threatened to impose 100% tariffs on branded and patented drugs starting October 1st, but later clarified that EU imports would face a 15% tariff.

Numbers & Facts

Merck: German pharmaceutical company, parent of EMD Serono.
EMD Serono: Merck's US subsidiary.
Gonal-F: Merck fertility drug with $973 million in sales in 2024.
Ovidrel and Cetrotide: Other Merck fertility drugs included in the agreement.
84%: Potential price reduction for patients using a combination of the three drugs.
1.8 billion euros: Merck's annual revenue in North America.
12,000-25,000 USD: Typical cost of an IVF cycle in the US.
Section 232: US law under which the tariff exemptions are granted.

Assessment

This agreement is a win for both Merck and the Trump administration. Merck gains tariff exemptions and continued access to the lucrative US market, while the Trump administration can tout its efforts to lower drug prices and increase access to fertility treatments. The deal potentially benefits millions of American women struggling with infertility by making IVF more affordable. It also strengthens Merck's position in the US fertility market and supports investment in US-based biopharmaceutical production and research. The move could also set a precedent for other pharmaceutical companies to negotiate similar agreements with the US government.

Outlook

The agreement is expected to take effect in early 2026, with Merck's fertility drugs becoming available through the "TrumpRX" direct distribution program. It remains to be seen how this agreement will impact the overall cost of IVF and access to fertility treatments in the US. The success of the "TrumpRX" program will also be a key factor in determining the long-term impact of the deal. Further negotiations between the US government and other pharmaceutical companies regarding drug pricing are likely to continue.

Source: https://www.tagesschau.de/wirtschaft/unternehmen/merck-pharmazoelle-abkommen-usa-100.html