Merck CEO Ken Frazier Considers Public Service After June Retirement

Merck & Co. last Thursday officially announced the planned retirement of its CEO, Ken Frazier, at the end of June. He will be succeeded by the current CFO Robert Davis.

Once Frazier retires as chief executive of Merck, he will become the executive chairman of the pharmaceutical giant for some time.

In an interview with CNBC, Frazier said he certainly would consider public service after retirement but not politics. He believes that he can give back to society more, that way. After mentioning that the first things he reads in the New York Times every morning are the obituaries.

“It’s not morbid,” Frazier said. “The reason you read them is because most of us spend our life polishing our resume … my dad used to say, ‘It’s what they say about you at the end that matters. Did you care about people?’ That’s not on your resume.”

During his time leading Merck, the company saw a new development in treating some forms of cancer and a dramatic shift in the business. Merck was responsible for the development of the most effective drug behind cancer immunotherapy: Keytruda. The medicine generated more than $14 billion in revenue last year, accounting for 29% of Merck’s total revenue.

Concerning his time at Merck as CEO, Frazier said one of the thongs he was proud of was the fact that the company beat the expectations of many analysts who said investing in research was a waste of time and money. “There was one publication, I can’t remember which, that said CEOs could create value in the industry by cutting research and investing in non-pharma assets.”

At the time, companies like Valeant were appealing to hedge fund investors who were buying up pharmaceuticals and cutting research budgets. Regardless of this, Frazier was hired by then Merck CEO Roy Vagelos to beat that trend. In the last decade, Frazier increased the company’s research budget by 24%, to $13.6 billion. He said Merck was a science-based company and research was one of its cores.

Although Merck experienced some rough times, and Frazier began to lose faith in the company, Merck managed to emerge stronger. In 2014, the Food and Drug Administration approved Merck’s Keytruda which became a major break in the company.

Keytruda was one of the new effective therapies that boost the immune system to fight cancer. It has been approved to treat over 20 different settings in cancer and was famously known to be used to treat former President Jimmy Carter of the melanoma that had spread to his brain and liver.

While Frazier celebrated some big wins during his time as Merck CEO, the company still faced some criticisms from both the medical and investor society.

Dr. Peter Bach of Memorial Sloan Kettering Cancer Center said Merck’s approach at clinical trials for Keytruda seemed more like a corporate strategy for revenue generation, rather than extracting useful information that would be most helpful.

“They’re ‘spreading their bets’. Launching dozens and dozens of smallish trials in an endless array of indications,” Bach said in an email. “But small trials, particularly of important therapies like Keytruda, don’t shed that much insight into the proper use of therapies.”

After a decade serving as Merck’s CEO, Frazier said he wants to do public service, which doesn’t necessarily mean “elected office.” He added that he is most passionate about issues of equity and justice, especially around education.  

“Almost 80% of African-Americans at age 26 don’t have a four-year degree,” Frazier said. “If you require a four-year degree as a pre-requisite, you’re excluding people structurally who can develop the skills to do valuable work, so they don’t get earned success.”

Frazier is also known for being actively engaged in the fight against racial discrimination. He was a loud voice during the Black Lives Matter protest which was caused by the unlawful killing of George Floyd, last summer.