Pfizer's ($PFE) Lipitor gap is beginning to fill in. The company won FDA approval for its targeted lung cancer drug Xalkori, which some analysts expect to add a very healthy $2.5 billion in peak sales to the top line. That's partly because the drug carries a gold-plated price tag: $9,600 per month, or $115,000 for a year's worth of treatment.
Pfizer has plans for cutting patients' share of that cost significantly. The company is offering copay assistance of up to $24,000 per year with a program that would have privately insured patients pay only $100 per prescription. If a patient had a 20% copay, that would cover a year's worth of treatment. The company also says it will help patients who are uninsured--or insured by Medicaid or Medicare--figure out how to cover Xalkori's costs. But as Forbes points out, Pfizer's assistance programs don't help payers cover their costs.
Whatever the price tag, Xalkori represents a significant milestone for cancer treatment--it's the first new lung cancer med in 6 years, and the first for this subgroup of patients with the ALK genetic mutation. It's also a significant milestone for Pfizer, which has struggled in recent years to bring new drugs to market.
It's also a milestone for companion diagnostics; along with the Xalkori approval came a nod for Abbott Laboratories' ($ABT) test to identify patients with the ALK mutation. "Xalkori represents a new chapter in personalized therapy for lung cancer, enabling physicians to provide the right treatment for the right patient," Pfizer's Mace Rothenberg said in a statement. Abbott's Stafford O'Kelly echoed that in his own statement: "The Abbott-Pfizer collaboration marks a breakthrough in the advancement of personalized medicine--and companion diagnostics specifically--that will help a subset of lung-cancer patients get treatment tailored to their unique genetic profile."