Merck faces a bipartisan congressional inquiry into its China clinical trials as shares trade near 128.5 dollars, a 52 week high, with a rich 35.99 P/E and elevated RSI.
Merck & Co. (NYSE:MRK), the pharmaceutical giant behind blockbuster cancer drug Keytruda and a broad portfolio of vaccines and prescription medicines, is facing fresh scrutiny in Washington after lawmakers opened a national security inquiry into its clinical trial practices in China. The news lands as shares trade at 128.5 dollars, just off their 52 week high.
At a Glance
- Merck shares closed at 128.5 USD, down 0.68% on the day
- 52 week range sits between 107.9 and 130.29 dollars
- Market capitalization stands at 317.77 billion dollars
- Price to earnings ratio of 35.99 with a dividend yield of 2.65%
- RSI reading of 68.01 signals the stock is approaching overbought territory
Lawmakers Question China Trial Oversight
A bipartisan group led by Republican Representative John Moolenaar of Michigan, who chairs the House Select Committee on China, sent letters dated Monday to Merck and AbbVie asking for details on due diligence, data protection and ethical standards at trial sites inside China, including facilities in Xinjiang and at military hospitals. The committee wants answers by July 17.
The letters point to Xinjiang as the center of what they call genocide against Uyghurs and other minority groups, and they cite documented lapses by Chinese researchers in securing informed consent from trial participants. Lawmakers argue that even though the Uyghur Forced Labor Prevention Act does not explicitly cover clinical trials, its spirit should guide companies operating in the region.
Merck responded that patient safety and ethical integrity remain priorities of its clinical research program and said it adheres to global guidelines wherever it operates. AbbVie declined to comment. A spokesperson for China's embassy in Washington dismissed the committee's actions as lacking credibility and accused U.S. lawmakers of politicizing trade and technology matters.
The letters stop short of alleging wrongdoing. They state plainly that there is no evidence either company broke the law, but argue that running trials in China exposes American drugmakers to ethical and security risks worth examining given Beijing's expanding footprint in biotech research.
China's Rising Share of Drug Trials
The inquiry arrives against a backdrop of a fast shifting global research map. By 2024, the United States accounted for roughly 37% of early stage drug development programs worldwide, down from 48% in 2015. China's share climbed from just 8% to more than 32% over the same period, according to industry data. Lower costs, faster regulatory turnaround and state subsidies have made China an increasingly attractive base for early human trials, the lawmakers' letters noted.
A December report from the National Security Commission on Emerging Biotechnology warned that China has built a vertically integrated biotech ecosystem positioned to challenge American dominance in the field. The Merck and AbbVie letters are being read as the latest expression of that broader unease in Congress.
What the Numbers Say
Merck trades at a price to earnings multiple of 35.99, a level that suggests investors are pricing in continued earnings growth well beyond the company's current pace, particularly given ongoing patent cliff concerns tied to Keytruda's eventual loss of exclusivity later this decade. The stock's RSI of 68.01 puts it near the threshold widely viewed as overbought, hinting that recent buying momentum may be stretched even as shares sit just 1.79 dollars below their 52 week high of 130.29.
Income focused investors still find something to like in the 2.65% dividend yield, a figure that has helped anchor the stock through periods of regulatory noise. The bull case rests on Merck's diversified pipeline and steady cash generation, which support that payout even as political risk headlines circulate. The bear case centers on valuation: a P/E near 36 leaves little room for disappointment, and any escalation in the China trial investigation, from expanded congressional scrutiny to potential restrictions on data sharing or trial sites, could weigh on sentiment before it shows up in earnings.
Frequently Asked Questions
What are lawmakers investigating at Merck?
Congressional lawmakers are examining Merck's clinical trial practices in China, including due diligence, data protection and ethical standards at sites in Xinjiang and military hospitals, with a response requested by July 17.
Has Merck been accused of breaking any laws?
No. The lawmakers' letters explicitly state there is no evidence Merck or AbbVie engaged in illegal activity, though they argue that operating trials in China carries ethical and security risks.
How has China's role in global drug trials changed?
China's share of early stage global drug development programs rose from about 8% in 2015 to more than 32% by 2024, while the U.S. share fell from 48% to roughly 37% over the same span, according to industry data.
What is Merck's current dividend yield?
Merck currently pays a dividend yield of 2.65%, based on its share price of 128.5 dollars as of June 28, 2026.
Watching for the Next Move
The July 17 deadline gives Merck and AbbVie a defined window to respond, and how thoroughly they comply could shape whether the inquiry escalates into hearings or fades from headlines. For now, Merck's stock continues to trade close to its yearly high, leaving investors to weigh a rich valuation and elevated RSI against a dividend that has proven durable through past controversies.
