After recently getting the approval of the U.S. Food and Drug Administration, Novartis AG (ADR) (NYSE:NVS) has announced that a flexible pricing system will be applied for Kisqali. The drug, which is used to treat metastatic breast cancer, is employing this strategy in a bid to get a share of the market that is currently dominated by Abemaciclib, a drug manufactured by Eli Lilly and Co (NYSE:LLY) and Ibrance, a drug manufactured by Pfizer Inc. (NYSE:PFE).
Wholesale prices
The flexible pricing structure will see a supply of 28 days of the 600-mg dose cost $10,950 while a four-week supply of a 400-mg dose will be priced at $8,760. Four-week supply of a dose of 200-mg will be priced at $4,380. A spokesperson for Novartis said that Kisqali’s wholesale prices were lower compared to those of its rivals.
“Kisqali will be the CDK 4/6 inhibitor with the lowest WAC price, and with the flexible pricing structure, we anticipate it will have an 18% to 20% lower aggregate cost based on the dosing seen in the trial,” said Novartis’ spokesperson.
Regulatory conditions
Other than fierce competition in the market, the flexible pricing structure could have been inspired by the fact that the regulatory conditions for the use of Kisqali are tougher than those of its rivals. Prior to starting the use of Kisqali, patients will be required to take an ECG test. The ECG test should also be taken on the 14th day during the first cycle as well as the beginning of cycle two. This is because mild cardiac arrhythmias was observed in the course of the clinical trials.
Last year, Novartis entered into pay-for-performance agreements for its Entresto heart failure drug. In the deal, customers would only be required to pay only for the value they received. The chief executive of the company, Joe Jimenez, is on record as predicting that the pricing environment will only get more difficult with ageing populations especially in the United States.
In Wednesday’s trading session, shares of Novartis AG edged up by 0.68% to close the day at $75.57.