HEALTH

Merck & Co. to Increase R&D; Budget: The world’s largest prescription drug company said it will raise research and development spending 12% to $1.3 billion this year, after telling Congress earlier in the week that national health reform could force the company to cut back on science. “We will keep pumping funds into research so long as it’s productive,” said Merck Chairman and Chief Executive P. Roy Vagelos at a meeting with analysts in New York. He said the research will focus on broadening Merck’s product line and the long-term cost-effectiveness of certain drugs. His comments came as the drug industry struggles to figure out how it will remain profitable in the era of managed care, which focuses sharply on cost.