MERCK & CO., INC. | Report on Patents and Access at MERCK & CO., INC.

AGM date
Previous AGM date
Resolution details
Company ticker
Resolution ask
Report on or disclose
ESG theme
  • Social
ESG sub-theme
  • Public health
Type of vote
Shareholder proposal
Filer type
Company sector
Health Care
Company HQ country
United States
Resolved clause
RESOLVED, that Merck & Co. Inc, (“Merck”) shareholders ask the Board of Directors to establish and report on a process by which the impact of extended patent exclusivities on product access would be considered in deciding whether to apply for secondary and tertiary patents. Secondary and tertiary patents are patents applied for after the main active ingredient/molecule patent(s) and which relate to the product. The report on the process should be prepared at reasonable cost, omitting confidential and proprietary information, and published on Merck’s website.
Supporting statement
SUPPORTING STATEMENT: Intellectual property protections on branded drugs play an important role in maintaining high prices and impeding access. When patent protection on a drug ends, generic manufacturers can enter the market, reducing prices. But branded drug manufacturers may delay generic competition by extending their exclusivity periods.
This behavior impedes access to medicines, especially costly specialty drugs. A 2021 Rand Corporation analysis concluded that U.S. prices for branded drugs were nearly 3.5 times higher than prices in 32 OECD member countries.1 The Kaiser Family Foundation has “consistently found prescription drug costs to be an important health policy area of public interest and public concern.”2
The Inflation Reduction Act (“IRA”) empowers the federal government to negotiate some drug prices, and some have argued it enacts significant patent reform, specifically around the issue this proposal addresses. This comes from one important provision of the IRA providing that the only drugs that can be considered for price negotiations are those with no generic competition, thus discouraging extended patent exclusivities.
One law firm asserts that “prevailing in a patent infringement lawsuit against a forthcoming competitor may no longer be as valuable for a branded drug company because high-expenditure single-source drugs are at risk of being selected for price negotiation if there is no generic or biosimilar competitor on the market.”
Additionally, there are 5 U.S. Senate bipartisan bills all aimed at addressing this issue:
1. Ensuring Timely Access to Generics Act of 2023 (S. 1067)
2. Expanding Access to Low-Cost Generics Act of 2023 (S. 1114)
3. Increasing Transparency in Generic Drug Applications Act of 2023 (S. 775) 4. Preserve Access to Affordable Generics and Biosimilars Act of 2023 (S. 142) 5. Stop STALLING Act of 2023 (S. 148)
Merck’s bestseller Keytruda has 95 secondary patents. 40% of Merck’s patent applications on Keytruda relate to “methods of production and processes that can be used to manufacture the drug,” which thwarts competition, after the primary patent on the drug has expired. 3.
A process that analyzes how extended exclusivity periods impact patient access would ensure that Merck abides by its commitment to “Patients First”4, when deciding whether to apply for secondary patents. Merck’s current approach may expose Merck to serious regulatory risks, given the bipartisan slate of bills aimed to combat rising drug prices. Additionally, public perception that Merck may have engaged in abusive patenting practices cannot be ignored.
2 3 See, at 3.
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