A Cancer Drug at $210,000 a Year

Merck & Co.'s blockbuster cancer drug Keytruda has crossed the $210,000 annual price threshold in the United States — a 6% increase during Donald Trump's presidency, even as the administration pledged to bring down prescription drug costs. A new report from minority members of the Senate Health, Education, Labor and Pensions (HELP) Committee confirmed the figure.

The Gap Between Promise and Reality

The Trump administration announced confidential agreements with more than a dozen pharmaceutical companies, including Merck, to reduce drug prices. Yet Keytruda — which accounts for nearly half of Merck's total revenue — appears to have been excluded from any meaningful price reduction.

When the International Consortium of Investigative Journalists (ICIJ) asked Merck CEO Robert M. Davis about the terms of the deal, he declined to answer. Senior Vice President Johanna Herrmann responded in writing: "We cannot disclose the details of this confidential agreement." She added that the deal's impact on the Keytruda business was "manageable" in both the short and long term — a statement widely interpreted as an implicit acknowledgment that Keytruda was shielded from price cuts.

Patent Fortresses and Opaque Pricing

The Cancer Calculus, a joint investigation by ICIJ and 47 media partners, reveals how Merck has built an extensive patent barrier to deter competition while maintaining opaque pricing structures that keep Keytruda's cost elevated. The FDA has approved Keytruda for 19 types of tumors, making it a near-irreplaceable treatment option with minimal price resistance.

ICIJ analysis found that a standard 200mg dose of Keytruda ranged from $1,700 in Indonesia to $12,000 in the United States before negotiations and rebates. The Senate report noted that the U.S. pays more than five times as much for Keytruda as Japan — a disparity the report attributes to structural market distortions, not simply market forces.

Keytruda is not alone. Bristol Myers Squibb's Opdivo rose 4% under Trump, and Johnson & Johnson's Darzalex climbed 6% — indicating a broad upward trend across the immunotherapy drug category.

From Breakthrough to Price Controversy: The Historical Thread

Keytruda received FDA approval in 2014 and rapidly expanded from melanoma into one of oncology's broadest treatment platforms. Its 2017 tumor-agnostic approval — covering cancers regardless of origin — dramatically widened its market reach and pricing power. Drug pricing debates intensified through the Obama and Biden administrations. The 2022 Inflation Reduction Act gave Medicare limited negotiation rights, but newly patented drugs like Keytruda were largely exempt. The Trump administration opted for voluntary private agreements instead, an approach this Senate report now calls into question.

Two Sides of the Debate

The pharmaceutical industry argues that high prices are a legitimate return on decades of R&D investment, and that price controls would erode future innovation incentives. Patient advocates counter that the current system structurally denies life-saving treatment to those who cannot navigate insurance coverage — and that opaque rebate arrangements mask the true patient burden.

Implications [Expert Analysis]

Keytruda's core patents are expected to expire after 2028, but biosimilar competition capable of meaningfully driving down prices is unlikely to materialize quickly. Merck's evergreening strategies — including a subcutaneous formulation and combination therapy patents — are widely seen as likely to delay generic entry further.

Congressional efforts to extend Medicare negotiation rights to immunotherapy drugs may gain momentum, but pharmaceutical lobbying and Republican resistance to market regulation suggest any legislation will face steep obstacles. Internationally, ICIJ's findings may accelerate pressure on Merck from countries using U.S. list prices as reference points, potentially tightening the global pricing environment.