BioCentury
ARTICLE | Politics & Policy

Bach challenges drug pricing rationale

August 14, 2014 1:34 AM UTC

In an op-ed in Forbes, Peter Bach, director of the Center for Health Policy Outcomes at Memorial Sloan Kettering Cancer Center, challenged drug companies' argument that drug prices are tied to the amount of R&D investment companies incur in developing a drug. To illustrate his point Bach used the non-small cell lung cancer (NSCLC) drugs Xalkori crizotinib from Pfizer Inc. (NYSE:PFE) and Zykadia ceritinib ( LDK378) from Novartis AG (NYSE:NVS; SIX:NOVN).

Bach argued that Novartis didn't have to do the same level of R&D for Zykadia that Pfizer did for Xalkori because Zykadia was second-to-market and benefited from Pfizer's R&D, yet Zykadia is priced similarly. The wholesale acquisition cost (WAC) for a one-month supply of Xalkori is $14,383, and the WAC for a one-month supply of Zykadia is $13,497, according to published Red Book prices. ...