⚠ Keytruda: Biosimilars in 2028, a Government Price in 2029High threat

Merck & Co. (MRK) — threat to the moat

Merck expects biosimilar Keytruda from December 2028 and a Medicare price from January 2029, and says its American sales will then fall materially.

Merck's largest threat arrives on two dates it has published itself. Biosimilar competition for Keytruda could begin in December 2028, when the primary compound patent expires1. And Merck expects Keytruda to be selected in 2027 for government price-setting under the Inflation Reduction Act, with the price effective on 1 January 2029, after which it expects that "U.S. sales of Keytruda will decline materially"2.

Keytruda exclusivity and pricing datesSep 2025Qlex approved,US patent 20432027expectedMedicareselectionDec 2028US biosimilarscould beginJan 2029governmentprice takes effect2031Europeanexclusivity endsMerck Form 10-K FY2025
Two American dates a month apart.

The two dates fall a month apart and hit the same sales. American Keytruda sales were $18,829 million in 20253, about 29% of Merck's total sales4. Keytruda as a whole was 49%5.

Merck's own general rule describes the likely shape: products that lose exclusivity suffer a significant and rapid loss of sales6, and the company expects Keytruda sales to be materially negatively impacted by biosimilar competition between 2028 and 20297. Europe follows in 20318.

Merck's defences are known. Keytruda Qlex, with an American patent to 20439, sold $463 million in the second quarter of 202610; the new products and acquisitions are on the Future Bets page. None is yet close to the scale required.

Europe's protection is already thinner than the patent date suggests. Merck notes that there may be attempts to challenge the patent or launch a biosimilar in some European jurisdictions following the expiry of data exclusivity in July 202611, five years before the compound patent there ends in 203112. Merck has also sued the United States government over the negotiation programme13; the lawsuit is its legal challenge to the 2029 date, and it has not yet changed it.

Merck's other large product faces a similar date. The Keytruda Qlex patent runs to 2043 in the United States but only to 2031 in Europe, with an application pending to 204014. Outside America, the injection offers much less shelter than at home.

The single figure that measures the threat is American Keytruda sales. If they are still above $18 billion in 2028, the fall that follows in 2029 will start from the highest base the drug has ever had; the only thing that softens it is how much of the American base has moved to Qlex before then.

The number that tests this threat
Reported
Keytruda U.S. sales, full year
$18,829M (2025), about 29% of Merck's sales

The pool exposed to both dates; the higher it is in 2028, the larger the 2029 fall.

Source: Merck Form 10-K, FY2025 ↗
References
  1. ReportedBiosimilar competition for Keytruda could begin in December 2028, when the primary compound patent expires.
    Merck & Co. Form 10-K for fiscal 2025 - patents, exclusivity dates, biosimilar competition and royalties. — FY2025 · publ. 24 February 2026 · source ↗
  2. ReportedAnd Merck expects Keytruda to be selected in 2027 for government price-setting under the Inflation Reduction Act, with the price effective on 1 January 2029, after which it expects that "U.S. sales of Keytruda will decline materially".
    Merck & Co. Form 10-K for fiscal 2025 - Item 1A risk factors, patents and exclusivity, government pricing, vaccine policy and legal proceedings. — FY2025 · publ. 24 February 2026 · source ↗
  3. ReportedAmerican Keytruda sales were $18,829 million in 2025, about 29% of Merck's total sales.
    Merck & Co. Form 10-K for fiscal 2025 - Item 7 MD&A and product sales note: sales by product, segment and country. — FY2025 · publ. 24 February 2026 · source ↗
  4. Moat Explorer calcAmerican Keytruda sales were $18,829 million in 2025, about 29% of Merck's total sales.
    Moat Explorer calculation from Merck's reported sales, segment and financial statement figures ($ millions unless stated). Lines 2025: Keytruda 31,641 + Keytruda Qlex 40 = 31,681; other pharmaceutical 58,142 - 31,681 - 5,233 = 21,228; Animal Health 6,354; other revenue 515; total 31,681 + 5,233 + 21,228 + 6,354 + 515 = 65,011. 2024: 29,482; 57,400 - 29,482 - 8,583 = 19,335. 2023: 53,583 - 25,011 - 8,886 = 19,686. 2022: 52,005 - 20,937 - 6,897 = 24,171. 2021: 42,754 - 17,186 - 5,673 = 19,895. Everything else 2025: 65,011 - 31,681 = 33,330. Keytruda share of sales: 11,084 / 39,121 = 28.3% (2019, continuing basis); 17,186 / 48,704 = 35.3% (2021); 25,011 / 60,115 = 41.6% (2023); 31,681 / 65,011 = 48.7% (2025); Q2 2026 8,366 / 16,607 = 50.4%. Keytruda and Gardasil Q2 2026 (8,366 + 1,169) / 16,607 = 9,535 / 16,607 = 57.4%. Qlex 463 / 8,366 = 5.5%. Keytruda growth: 31,641 / 29,482 - 1 = 7.3% (2025); 29,482 / 25,011 - 1 = 17.9% (2024); 31,641 / 17,186 = 1.84, compound (1.84)^(1/4) - 1 = 16.5% a year; 31,641 / 11,084 = 2.85 (2019-2025). US share of Keytruda 18,829 / 31,641 = 59.5%. International Keytruda 12,812 / 11,610 - 1 = 10.4%; US Keytruda 18,829 / 17,872 - 1 = 5.4%. US Keytruda share of total sales 18,829 / 65,011 = 29.0%. Royalty: 2.5% x 31,681 = 792; 6.5% x 31,681 = 2,059. Gardasil US royalty 7% x 2,641 = 185. Winrevair royalty 22% x 1,443 = 317; 22% x 419 = 92; Winrevair Q2 2026 588 x 4 = 2,352, 22% x 2,352 = 517. Segment margins: Pharmaceutical 45,754 / 58,142 = 78.7% (2025); Q2 2026 11,612 / 14,760 = 78.7% (recast basis). Animal Health 2,131 / 6,354 = 33.5% (2025); 1,938 / 5,877 = 33.0% (2024); 1,737 / 5,625 = 30.9% (2023); 1,963 / 5,550 = 35.4% (2022); 1,950 / 5,568 = 35.0% (2021); Q2 2026 636 / 1,775 = 35.8%. Unallocated research 14,987 / 58,142 = 25.8%; Animal Health research 448 / 6,354 = 7.1%. Animal Health segment profit 2,131 / 45,754 = 4.7% of Pharmaceutical. Gardasil: international 2,592 / 6,158 - 1 = -57.9%; US 2,641 / 2,083 - 1 = 26.8%; share 5,233 / 65,011 = 8.0%; share of sales 2021 5,673 / 48,704 = 11.6%, 2022 6,897 / 59,283 = 11.6%, 2023 8,886 / 60,115 = 14.8%, 2024 8,583 / 64,168 = 13.4%; Q2 2026 1,169 x 4 = 4,676. Vaccines H1 2026 2,314 + 2,361 = 4,675; H1 2025 2,607 + 2,370 = 4,977; 4,675 / 4,977 - 1 = -6.1%. Childhood vaccines growth 2,368 / 2,241 - 1 = 5.7%; 2,485 / 2,368 - 1 = 4.9%; 2,451 / 2,485 - 1 = -1.4%. Pneumococcal: Pneumovax 166 / 893 - 1 = -81%; 825 + 759 + 166 = 1,750; 1,750 / 893 = 2.0; (825 + 759) / 166 = 9.5; Capvaxive + Vaxneuvance 759 + 825 = 1,584; 1,584 / 6,494 = 24.4% of Prevnar. Animal Health: livestock 3,896 / 6,354 = 61.3%; livestock growth 3,300 / 3,295 - 1 = 0.2%, 3,337 / 3,300 - 1 = 1.1%, 3,462 / 3,337 - 1 = 3.7%, 3,896 / 3,462 - 1 = 12.5%; companion 2,458 / 2,415 - 1 = 1.8%, 2,458 / 2,273 - 1 = 8.1%; companion excluding Bravecto 2,458 - 1,100 = 1,358; rest of Animal Health 6,354 - 1,100 = 5,254; Bravecto 359 / 335 - 1 = 7%. Segment 6,354 / 5,877 - 1 = 8.1%; 5,625 / 5,568 - 1 = 1.0%; Q2 2026 1,775 / 1,646 - 1 = 7.8%; compound (6,354 / 5,568)^(1/4) - 1 = 3.4% a year; share 6,354 / 65,011 = 9.8%; 6,354 / 31,681 = 0.20 of Keytruda; 6,354 / 9,467 = 67% of Zoetis; Zoetis 9,467 / 9,256 - 1 = 2.3%. Competitors: Keytruda 31,641 / Opdivo 10,049 = 3.1. Geography: US 36,510 / 65,011 = 56.2%; China 1,939 / 6,802 - 1 = -71%; China share 4,378 / 48,704 = 9.0% (2021), 6,802 / 60,115 = 11.3% (2023), 5,494 / 64,168 = 8.6% (2024), 1,939 / 65,011 = 3.0% (2025); other regions 65,011 - 36,510 - 14,580 - 2,711 - 1,939 = 9,271. Wholesaler receivables 22% + 21% + 13% = 56% (2025); 21 + 21 + 13 = 55 (2024); 21 + 20 + 14 = 55 (2023). Januvia and Janumet: 3,324 + 1,964 = 5,288 (2021); 2,189 + 1,177 = 3,366 (2023); 1,334 + 935 = 2,269 (2024); 1,604 + 940 = 2,544 (2025). Newer products Q2 2026: 588 + 271 + 204 + 184 = 1,247; 1,247 / 8,366 = 14.9%. Bridion 1,841 / 4 = 460 a quarter. Other pharmaceutical Q2 2026 14,760 - 8,366 - 1,169 = 5,225; Q2 2025 14,050 - 7,956 - 1,126 = 4,968; 5,225 / 4,968 - 1 = 5.2%; 2025 share 21,228 / 65,011 = 32.7%. Research: 30,531 / 60,115 = 50.8% of sales (2023). Charges 2026 9.0 + 5.7 = 14.7 bn; per share 3.62 + 2.31 = 5.93. Ohtuvayre 204 x 4 = 816; 12,100 / 816 = 14.8. Tax guidance midpoints (23.5 + 24.5) / 2 = 24.0; (35.0 + 36.0) / 2 = 35.5. Balance sheet: net debt end-2025 2,589 + 46,750 - 14,565 = 34,774; end-2024 2,649 + 34,462 - 13,242 - 447 = 23,422; end-2023 1,372 + 33,683 - 6,841 - 252 = 27,962; 30 June 2026 2,825 + 51,081 - 6,849 - 292 = 46,765, cash and short-term investments 6,849 + 292 = 7,141; net debt to equity 34,774 / 52,606 = 0.66; 46,765 / 41,933 = 1.1. Net income 2023-2025 365 + 17,117 + 18,254 = 35,736. Valuation: year-end 2025 market value 261.26 bn / net income 18.254 bn = 14.3; free cash flow 2025 16,472 - 4,112 = 12,360; 12,360 / 365,090 = 3.4%. Trailing twelve months to June 2026: sales 65,011 - 31,335 + 32,893 = 66,569; net income 18,254 - 9,506 - 5,575 = 3,173. EPS guidance midpoints (5.00 + 5.15) / 2 = 5.075; (5.04 + 5.16) / 2 = 5.10; (2.66 + 2.76) / 2 = 2.71. Protection from 2026: 2043 - 2026 = 17 years; 2028 - 2026 = 2 years. Year-end P/E = market value / net income: 147.55 / 4.442 = 33.2 (2015); 162.31 / 3.920 = 41.4 (2016); 153.30 / 2.394 = 64.0 (2017); 198.69 / 6.220 = 31.9 (2018); 231.56 / 9.843 = 23.5 (2019); 206.96 / 7.067 = 29.3 (2020); 193.59 / 13.049 = 14.8 (2021); 281.30 / 14.519 = 19.4 (2022); 276.26 / 0.365 = 757 (2023); 251.65 / 17.117 = 14.7 (2024); 261.26 / 18.254 = 14.3 (2025); 365.09 / 3.173 = 115.1 (TTM). Return on average equity 2025: 18,254 / ((52,606 + 46,313) / 2) = 18,254 / 49,460 = 36.9%. Gross profit 2025 65,011 - 16,382 = 48,629; 48,629 / 65,011 = 74.8%; royalty 792 / 16,382 = 4.8% of cost of sales. Keytruda increase 2021-2025 31,681 - 17,186 = 14,495; sales increase 65,011 - 48,704 = 16,307. US sales 36,510 / 28,480 - 1 = 28%. Pharmaceutical margin 2021 30,977 / 42,754 = 72.5%. Livestock less companion 3,295 - 2,273 = 1,022 (2021); 3,896 - 2,458 = 1,438 (2025). Prevnar 6,494 / Vaxneuvance 825 = 7.9. Animal Health 2025 6,354 against Keytruda franchise Q2 2026 8,366 - revenue mix, concentration and geography. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Merck's Forms 10-K and 10-Q, results releases, the Bristol Myers Squibb, Pfizer and Zoetis 10-Ks and market data; operands shown in the source line.
  5. ReportedKeytruda as a whole was 49%.
    Merck & Co. Form 10-K for fiscal 2025 - Item 1 business: products, customers, segments and people. — FY2025 · publ. 24 February 2026 · source ↗
  6. ReportedMerck's own general rule describes the likely shape: products that lose exclusivity suffer a significant and rapid loss of sales, and the company expects Keytruda sales to be materially negatively impacted by biosimilar competition between 2028 and 2029.
    Merck & Co. Form 10-K for fiscal 2025 - patents, exclusivity dates, biosimilar competition and royalties. — FY2025 · publ. 24 February 2026 · source ↗
  7. ReportedMerck's own general rule describes the likely shape: products that lose exclusivity suffer a significant and rapid loss of sales, and the company expects Keytruda sales to be materially negatively impacted by biosimilar competition between 2028 and 2029.
    Merck & Co. Form 10-K for fiscal 2025 - patents, exclusivity dates, biosimilar competition and royalties. — FY2025 · publ. 24 February 2026 · source ↗
  8. ReportedEurope follows in 2031.
    Merck & Co. Form 10-K for fiscal 2025 - Item 1 business: products, customers, segments and people. — FY2025 · publ. 24 February 2026 · source ↗
  9. ReportedKeytruda Qlex, with an American patent to 2043, sold $463 million in the second quarter of 2026; the new products and acquisitions are on the Future Bets page.
    Merck & Co. Form 10-K for fiscal 2025 - patents, exclusivity dates, biosimilar competition and royalties. — FY2025 · publ. 24 February 2026 · source ↗
  10. ReportedKeytruda Qlex, with an American patent to 2043, sold $463 million in the second quarter of 2026; the new products and acquisitions are on the Future Bets page.
    Merck second-quarter 2026 results release, Form 8-K exhibit 99.1 - sales by product and pipeline highlights. — Q2 2026 · publ. 4 August 2026 · source ↗
  11. ReportedMerck notes that there may be attempts to challenge the patent or launch a biosimilar in some European jurisdictions following the expiry of data exclusivity in July 2026, five years before the compound patent there ends in 2031.
    Merck & Co. Form 10-K for fiscal 2025 - patents, exclusivity dates, biosimilar competition and royalties. — FY2025 · publ. 24 February 2026 · source ↗
  12. ReportedMerck notes that there may be attempts to challenge the patent or launch a biosimilar in some European jurisdictions following the expiry of data exclusivity in July 2026, five years before the compound patent there ends in 2031.
    Merck & Co. Form 10-K for fiscal 2025 - patents, exclusivity dates, biosimilar competition and royalties. — FY2025 · publ. 24 February 2026 · source ↗
  13. ReportedMerck has also sued the United States government over the negotiation programme; the lawsuit is its legal challenge to the 2029 date, and it has not yet changed it.
    Merck & Co. Form 10-K for fiscal 2025 - Item 1A risk factors, patents and exclusivity, government pricing, vaccine policy and legal proceedings. — FY2025 · publ. 24 February 2026 · source ↗
  14. ReportedThe Keytruda Qlex patent runs to 2043 in the United States but only to 2031 in Europe, with an application pending to 2040.
    Merck & Co. Form 10-K for fiscal 2025 - patents, exclusivity dates, biosimilar competition and royalties. — FY2025 · publ. 24 February 2026 · source ↗
Sources
Generated September 25, 2026