Pharmaceutical Manufacturer Pledges Responsible Drug Pricing Model

In light of the growing controversy surrounding the high cost of prescription drugs, KaloBios Pharmaceuticals, Inc has announced a new, responsible pricing model to guide the company’s strategy and operations. This pricing model will apply to all current and future products made by the manufacturer.

"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, KaloBios' chairman and chief executive officer in a press release. "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."

To KaloBios, responsible pricing means that all drugs are affordable for both patients and payers. It also means that it is transparent for stakeholders and has a reasonable return for the company.

KaloBios plans to price their products at cost and add a reasonable and transparent profit when the drugs are commercialized.

For drugs such as benznidazole, a research and development premium will not be incorporated into the price since the company is not conducting original research. The company states this drug will be sold at cost with a modest profit margin.

KaloBios also states they will share the elements that make up the pricing of their drugs and will also seek assistance from key stakeholders in order to determine what a reasonable return would be.

The company pledged to not increase prices at random and only increase prices no more than once per year due to the rate of inflation or Consumer Price Index. They also committed to not participate in “price-gouging.”

If and when KaloBios commercializes benznidazole, the company plans to ensure all patients will have access to the drug, even if they cannot pay. This drug would also be offered in developing countries at, or near cost, and said they will work work with other companies to create access programs to make sure patients receive the medication.

KaloBios said they will share additional information on how they will implement this model.