Sam,
I tend to agree that $600 per year would be a generously low
price for this kind of drug if there is no competition. However,
I am assuming that competition will come from Centocor's CA2, Amgen's
TNF-bp, or Roche's compound. I think that $7,000 per year is too
high. Yes, some people would pay this amount, and I'm not saying that
the drug would not be worth this price to many. However, setting
the price this high would invite a backlash from Congress and
insurers. I don't believe that Roche would want to risk the
negative publicity. Therefore, I think that they will come on the
market with the drug at between $800 and $1,200 per year and will
lower it to around the $600 per year level once a competitive
offering is available. The key for Immunex is to be first and have
a good relationship with insurers including Medicade. This will
allow them to keep the lion's share of the market when competition
does surface.
Best Wishes,
The Thrifty Investor
P.S. If they did come to market at $7,000 per year, I think that
their margins would be much greater than 30%. |
