US plans shift of Merck COVID treatment to commercial market

By Michael Erman

(Reuters) - The U.S. government will stop distributing free doses of Merck & Co's COVID-19 antiviral treatment molnupiravir by the middle of next month and expects it to be sold on the commercial market instead.

The Administration for Strategic Preparedness and Response (ASPR), a division of the U.S. Department of Health and Human Services, said in a statement posted on its website late last week they anticipate transition of the drug, sold under the brand name Lagevrio, from government-managed to traditional commercial distribution in November.

Merck, which developed the drug with Ridgeback Biotherapeutics, said in an emailed statement on Wednesday that it needs an updated letter of authorization from the U.S. Food and Drug Administration to allow it to start selling the drug commercially.

Molnupiravir was initially hailed as a potential breakthrough when few treatment options were available but was soon eclipsed by Pfizer's rival treatment Paxlovid, which had more impressive data.

It has taken a backseat to Paxlovid in the United States and the EU regulator recommended against the Merck drug's use in the region.

Trial data showed a roughly 30% reduction in hospitalizations and deaths from the illness in people with risk of progression for severe disease with the Merck drug, compared with a roughly 90% reduction in hospitalization for Paxlovid.

It has also been linked to potentially transmissable mutations in the COVID-19 virus, according to a study published in the journal Nature last month. Merck said the study was limited and that it is confident in the clinical profile of the drug.

Molnupiravir's global sales have dropped sharply since last year, when the company booked nearly $5.7 billion in revenue. This year, the company expects sales of the drug to be around $1 billion, and analysts forecast a further drop going forward.

Since authorization, the U.S. government has delivered more than 3.2 million courses of molnupiravir of which more than 1.4 million have been administered, according to ASPR data. That compares with 15.4 million courses of Paxlovid delivered and nearly 10 million used.

The U.S. still has additional Paxlovid inventory, which will continue to be available for free at pharmacies around the country until it too moves to the commercial market.

Merck said it would have a patient assistance program for people who cannot afford the drug.

(Reporting by Michael Erman; Editing by Bill Berkrot)