Merck proud to be a US-based company: CEO Frazier

Merck CEO: We're proud to be American

In the wake of Pfizer's failed merger attempt to facilitate a move overseas for apparent tax purposes, Merck chief Kenneth Frazier told CNBC Wednesday the drugmaker is "very proud" to be an American company.

But the Merck chairman and CEO also said the government needs to modify its high corporate tax code relative to other countries to level the playing field so "U.S.-based companies are no longer at a competitive disadvantage with European and Japanese companies."

Last week, Pfizer abandoned plans to try to buy AstraZeneca, after its British rival rejected the American pharma giant's $116 billion "final offer." The deal would have allowed New York-based Pfizer to move its headquarters to the U.K., where corporate taxes are not as high.

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In a "Squawk Box" interview, Frazier didn't want to comment directly on Pfizer's moves, but said: "Over the long term, the intrinsic value creation in the pharmaceutical business comes down to R&D. It comes down to innovation."

He said that's what Merck is focused on for patients and shareholders. "By innovating, we can have sustainable long-term cash flow, which is what creates value."

Earlier this month, Bayer AG of Germany agreed to buy Merck's consumer care business for $14.2 billion.

—By CNBC's Matthew J. Belvedere