Merck bows to pressure

MERCK & CO, the leading US pharmaceutical company and the world's largest maker of prescription drugs, has agreed to sign a three-year contract with the US government restricting its price increases. The move appears to be one of the first in Hillary Clinton's reorganisation of the US health sector, which is expected to lead to widespread cuts in drug prices.

Merck said it had put forward a proposal that would limit drug companies' annual price increases for entire product lines to the rise in the consumer price index. It also proposes limiting annual drug price increases to the rate of inflation plus one percentage point.