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MS&D DRUG PRICE INCREASES WILL TOTAL 4.7% FOR 1990

Executive Summary

MS&D DRUG PRICE INCREASES WILL TOTAL 4.7% FOR 1990, according to an April 1 trade announcement. "The full-year 1990 impact of 1989 and 1990 pricing actions will result in an estimated 4.7% total price increase for 1990," Merck said. "This follows an identical increase for 1989," the company added. Merck Sharp & Dohme's updated price list was effective April 1. Among the products increasing 5% were Vasotec, Mevacor, Pepcid, Indocin, Vaseretic, Clinoril and Dolobid. MS&D's total price increase for this year is approximately half the industry average in recent years. Industry-wide, prices have been increasing at 9-10%. According to Merck, "weighted average price increases of 4.7% in 1989 and 1990 represent, in our opinion, a responsible approach to the management of increasing costs while continuing to serve the needs of patients, the medical community, and the corporation's 1990 research and development program of $855 mil." Merck is in a good position to hold back price increases with a wide line of products showing good unit gains. Product price increases added only 3% to worldwide sales in 1989 for the second consecutive year ("The Pink Sheet" March 19, T&G-9). * The company has been trying to play an active role in the public debate on drug pricing. The firm is believed to be looking carefully at a response to the continued pressure from Sen. Pryor (D-Ark.) for better prices for state drug Medicaid programs. MS&D execs reportedly are reviewing the calls for bidding to the state programs in light of the political challenge from Pryor and as a question of broad access to the MS&D line. Merck Vice Chairman John Lyons expressed the company's concern for state Medicaid programs on his address as outgoing PMA chairman on April 3. Noting that the industry has combatted state drug formularies, he said: "In fairness, we must note that intense problems remain as the squeeze on budgets tightens."
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