Working for VAVA Inc. is a daily experience in learning; granting the opportunity to analyze businesses in almost every field, ranging from pharmaceuticals to hospitals to cosmetics giants to physician practices to breeders of Australian Flying Squirrels. My uncle, Dr. David Young, was a renowned liver specialist and researcher at Duke and Yale before leukemia ended his life. My mother, mother-in-law, grandmother, and siblings lived through and successfully persevered against various cancers. God bless the physicians and medications making a daily contribution to wellness!
From a different perspective, the news report that Merck is on pace to generate $10 billion a year from sales of Keytruda, its top-selling cancer drug, presents mixed signals for me as a valuation professional and as an ethical person. $10 billion of sales makes a major contribution to the value of Merck stock ($83.35 per share). However, the massive R&D cost associated with bringing Keytruda to market dilutes the value gain significantly. On the human side, the cost of one 3-week treatment dose with Keytruda reportedly costs $5,000 to $7,500. The annual cost can be as high as $250,000. So we have a life-changing drug option that few can afford! This is a real humanity dilemma.
I do not own Merck stock but I would certainly contribute to a Foundation that would fund high cost medication costs for cancer patients and sufferers of other chronic, long-term, life threatening ailments who cannot pay exorbitant costs.