What can a latecomer do to grab market share? Cut prices, of course. And that's just what GlaxoSmithKline plans to do as it launches the cancer vaccine Cervarix, aiming to compete with entrenched rival Gardasil. The Financial Times reports that Glaxo plans to undercut Merck's wholesale list price of $399 for a three-dose course of Gardasil. Glaxo's version will be tagged at $386.
That's not much of a difference. But as you know, the price tag is just an indicator; drugmakers negotiate prices with big payers such as pharmacy benefits managers, insurers and the government. In this case the tag sends a message that Glaxo intends to win on price. Already the company has grabbed contracts for government vaccine programs, notably in the U.K., where a lower price helped tip the balance in its favor.
Meanwhile, now that Merck has the marketing OK for Gardasil use in boys and young men, the company is offering rebates and other incentives to persuade males to get vaccinated. The rebates will help cover patients' out-of-pocket costs, at a rate of up to $130 per dose.
We may get a better indicator of Glaxo's pricing plans after the U.S. Centers for Disease Control and Prevention reviews both Cervarix for girls and Gardasil for boys. Once Glaxo has a CDC recommendation in hand, it can negotiate deals with insurers and other payers. So stay tuned.
- read the release from Merck
- see the FT story