Drugmaker commits to “responsible” prices

April 20, 2016

While drug manufacturers have come under fire for high prices-including Congressional hearings on the topic-one manufacturer is committing to “responsible” pricing.

While drug manufacturers have come under fire for high prices-including Congressional hearings on the topic-one manufacturer is committing to “responsible” pricing.

Even though KaloBios Pharmaceuticals does not yet have products on the market, company leaders announced a new pricing model that applies to all products in the company's current and future pipeline, including benznidazole to treat Chagas disease.

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KaloBios commits to “not engage in aggressive or predatory pricing policies or ‘price-gouging’,” according to a company statement. In addition, the company says it will set responsible pricing that is affordable for patients and payers and delivers a reasonable return to the company.

Ironically, KaloBios filed for bankruptcy protection in late December, 2015.

“We plan to price our products at overall cost, plus a reasonable and transparent profit margin, if and when we commercialize them,” KaloBios said.

For example, with benznidazole, the drug’s price will be based on “cost plus a modest profit margin. We are not conducting original research on benznidazole and therefore do not plan to incorporate an ‘R&D premium’ into the price,” the company said.

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"Our new pricing model is a commitment to define and develop transparent, responsible pricing for the products we hope to bring to patients in the future," said Cameron Durrant, MD, chairman and CEO of KaloBios. "Drug pricing is a big concern for all stakeholders in healthcare. We believe that our approach balances the needs of key stakeholders, including patients, clinicians, payers, NGOs, investors, policy makers and advocacy groups."

KaloBios also pledges to “not take arbitrary price increases on our products and will limit any increase to no more than the rate of inflation or Consumer Price Index and to no more than once a year, if at all.”

The company plans to ensure that patients, irrespective of their ability to pay, will have access to benznidazole, if and when KaloBios commercializes the product for Chagas disease.

Read more: Hearing ups pressure on drugmakers’ prices