Merck CEO sees Keytruda in pole position in cancer race

DAVOS, Switzerland (Reuters) - Merck & Co’s Keytruda cancer drug, which last week won a speedy review from U.S. regulators for use with chemotherapy in lung cancer, is in an increasingly strong position in a fiercely competitive market, the company’s CEO said on Thursday.

Chairman and CEO of Merck & Co., Kenneth Frazier, takes part in a panel discussion during the Clinton Global Initiative's annual meeting in New York, September 27, 2015. REUTERS/Brendan McDermid

Chief Executive Ken Frazier said that Keytruda in combination therapy could also be cheaper than some rival approaches -- an increasingly important consideration in an era of heightened controversy about high drug prices.

The U.S. Food and Drug Administration (FDA) is due to decide by May 10 whether to approve a combination of the immune system-boosting drug with chemotherapy as an initial therapy for advanced lung cancer, the largest cancer market.

The rapid FDA review means that the U.S. drugmaker could leapfrog rivals in the race for combination treatments.

“It’s always best to be first,” Frazier told Reuters on the sidelines of the World Economic Forum in Davos.

Keytruda’s progress came as a surprise to many investors. Although Merck presented good results from a small trial in October, it had been widely thought that data from a larger Phase III combination study would also be needed.

Frazier said that the early filing reflected the fact that the treatment effect was “pretty remarkable”.

Many experts previously assumed that combinations of two expensive immuno-oncology (I-O) drugs from AstraZeneca and Bristol-Myers Squibb would be approved before chemotherapy ones for fighting lung cancer.

“That doctors can do it at a price point that is lower than a combination of two I-O agents is a benefit to the healthcare system,” Frazier said.

“I’m quite sure that in Europe, where health ministers are extremely cost-conscious, the fact this combination appears to be economically advantageous will not escape their attention.”

With President-elect Donald Trump last week saying that drugmakers are “getting away with murder” on prices, Frazier acknowledged that pricing would remain a challenge for the industry.

Some companies have pledged to limit annual increases to less than 10 percent but Frazier said this is not applicable to Merck.

“Since we never did those kinds of double-digit price increases, I don’t feel compelled to follow suit,” he said.

(This story corrects to add dropped words in second paragraph.)

Editing by David Goodman