Getting a drug through the FDA often isn't enough for drug companies. To make money, they've also got to persuade someone -- usually health insurers like UnitedHealth Group
That's what makes this week's article and editorial in The New England Journal of Medicine about Merck's
The problem is that Gardasil is approved for females aged 9 through 26. That's fine as far as it goes, but Merck has been trying to get it approved for women through age 45. Even if it succeeds in getting the label expanded, it might be difficult to get insurers and government agencies to pay for the vaccine.
There's certainly precedent for payers rejecting drugs that don't have a large enough benefit. For instance, the UK's National Institute for Health and Clinical Excellence is considering not paying for kidney cancer treatments like Pfizer's
To combat a similar possibility, Merck is offering doctors a free replacement dose when a dose is given to a patient who then finds out that her insurance won't cover it. This might lead to patients deciding to finish the three-dose regimen and pay for the remainder out of pocket.
With Merck and Schering-Plough
UnitedHealth Group and Pfizer are Motley Fool Inside Value picks. If you're interested in picking through the market wreckage for possible turnaround candidates, you should have the Inside Value team on your side. Check it out with 30 days of free access.
Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Pfizer and GlaxoSmithKline are Income Investor recommendations. UnitedHealth Group is also a Stock Advisor recommendation. The Fool has a disclosure policy.
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