Oct 29, 2021 - Health

The Keytruda boom

Keytruda sales, by quarter
Data: Company filings; Chart: Thomas Oide/Axios

Cancer drug Keytruda is on pace to generate more than $17 billion of revenue this year after reaching a record $4.5 billion of sales in the third quarter.

Why it matters: Keytruda is close to becoming the highest-selling drug in the world and would be a Fortune 200 company on its own.

Driving the news: Keytruda continues to be the core of Merck, even though executives told Wall Street yesterday the company expects to collect between $5 billion and $7 billion, now through 2022, from its coronavirus pill molnupiravir.

  • That's a lot of money, but molnupiravir still wouldn't be half as much as what Keytruda brings in annually for Merck.
  • Keytruda represents "the vast majority of the company's revenue growth" and is the company's profit engine, Merck said in a filing earlier this year.

How we got here: Keytruda, which is administered intravenously in a hospital or outpatient office, has been on the market since late 2014 and has shown to be extremely effective.

  • Merck has obtained several new FDA approvals that expand the drug's label into more types of cancers.
  • Merck is also pushing to use the drug after surgeries as a way to prevent cancers from coming back.

Between the lines: Because Keytruda is given in a health care facility and not picked up at a pharmacy, the drug is billed and paid for in a different way, but still exposes cancer patients to high out-of-pocket spending regardless of their insurance.

  • Keytruda has a list price of almost $175,000 per year (and Merck just raised that price by another 2% this month).
  • That means insured patients who take the drug routinely hit out-of-pocket maximums, which could equal thousands of dollars every year.

The bottom line: Keytruda's patent doesn't expire until 2028, and given the lack of federal drug pricing reform, Keytruda will continue to be among the highest-selling drugs.

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