Cephalon hikes prices to fight generic

Today's Wall Street Journal dissects a familiar drug-pricing strategy: pre-patent-expiration sticker shock. On the table is the Cephalon narcolepsy treatment (and sometime cognitive booster) Provigil. That drug faces generic competition in 2012. Naturally, Cephalon doesn't want to say goodbye to all that brand-name revenue; the drug brought in $707 million during the first nine months of this year, or about half of the company's year-to-date sales of $1.43 billion.

So Cephalon is developing a longer-acting version of Provigil, to be dubbed Nuvigil. The new formulation is set to launch next year. In preparation for that launch, Cephalon has been ratcheting up the price of Provigil, to give users reason to switch to the less-expensive new version. "You should expect that we will likely raise Provigil prices to try to create an incentive for the reimbursers to preferentially move to Nuvigil," the WSJ quotes a Cephalon VP as saying.

And here's how those numbers are shaking out so far: Provigil is now 28 percent more expensive than is was in March and 74 percent costlier than it was four years ago, according to DestinationRx. And Cephalon plans to continue raising that price, the WSJ says.

The idea is that, by the time 2012 rolls around, most Provigil users will have switched to the cheaper Nuvigil, which will be under patent through 2023. Firmly entrenched as Nuvigil users, they'll have less reason to adopt the cheaper generic. Or so Cephalon hopes.

- read the WSJ story
- check out the post at the WSJ Health Blog