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    What Merck (MRK)'s Diabetes Price Cuts and Oncology Advances Mean For Shareholders

    Simply Wall St·12/22/2025 13:13:18
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    • Earlier this month, Merck reached a historic agreement with the Trump administration to sharply cut U.S. prices on several medicines, including offering JANUVIA, JANUMET and JANUMET XR to eligible patients through a direct-to-patient program at roughly 70% below current list prices, while also reporting positive Phase 3 results for KEYTRUDA plus Padcev in muscle-invasive bladder cancer.
    • Alongside this pricing shift, Merck is advancing enlicitide, an oral PCSK9-like cholesterol candidate, and strengthening its oncology portfolio with earlier-stage bladder cancer data, which together highlight how the company is trying to balance affordability pressures with continued investment in high-impact therapies.
    • Next, we’ll consider how Merck’s decision to materially cut U.S. diabetes drug prices could reshape its investment narrative around growth and risk.

    Find companies with promising cash flow potential yet trading below their fair value.

    Merck Investment Narrative Recap

    To own Merck, you need to believe its broad pipeline and established franchises can offset eventual KEYTRUDA patent pressure, while pricing and policy changes stay manageable. The new U.S. deal to sharply lower diabetes drug prices looks important for access but does not materially change the near term focus on KEYTRUDA data, regulatory milestones and how quickly newer products like WINREVAIR and CAPVAXIVE scale. The biggest immediate risk remains any setback to KEYTRUDA or its key combinations.

    The recent positive Phase 3 results for KEYTRUDA plus Padcev in muscle invasive bladder cancer tie directly into that KEYTRUDA centered catalyst. If regulators convert these findings into wider bladder cancer indications, it could help Merck deepen its oncology reach ahead of loss of exclusivity, partly balancing concerns that broader U.S. pricing pressure, as seen with the JANUVIA and JANUMET discounts, might weigh on future margins and reinvestment capacity.

    Yet even as KEYTRUDA broadens its role in bladder cancer, investors should be aware that...

    Read the full narrative on Merck (it's free!)

    Merck's narrative projects $72.0 billion revenue and $24.3 billion earnings by 2028. This requires 4.2% yearly revenue growth and a $7.9 billion earnings increase from $16.4 billion.

    Uncover how Merck's forecasts yield a $106.62 fair value, a 5% upside to its current price.

    Exploring Other Perspectives

    MRK 1-Year Stock Price Chart
    MRK 1-Year Stock Price Chart

    Twenty six fair value estimates from the Simply Wall St Community span about US$82 to US$215 per share, showing wide disagreement on Merck’s worth. Against that backdrop, Merck’s recent decision to cut U.S. diabetes drug prices while leaning on KEYTRUDA to anchor growth gives you several different risk reward stories to compare before deciding how this stock might fit into your portfolio.

    Explore 26 other fair value estimates on Merck - why the stock might be worth over 2x more than the current price!

    Build Your Own Merck Narrative

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.