Senator questions Pfizer's $2,000-a-month price on Xeljanz

Should taxpayers enjoy lower drug prices if federal money backed development? At least one U.S. senator thinks so, now that Pfizer ($PFE) has slapped a $2,000-per-month sticker price on the new rheumatoid arthritis drug Xeljanz.

As The New York Times reports, Sen. Ron Wyden has written NIH chief Francis Collins, asking for documents about Pfizer's work with federal scientists on Xeljanz. The Oregon Democrat also wants the agency to "convene an outside panel to reexamine the pricing of medicines and treatments developed with public funds," his letter states.

Wyden says he wants "to gain an undertanding of what the public can expect as a return on its research investment." Apparently, some of that return would come in the former of lower prices on drugs developed with federal support. And that, in turn, would save money for government programs like Medicare and the Veterans Administration.

Pfizer, of course, takes issue with Wyden's position. The company says it invested more than $1 billion into developing and commercializing Xeljanz. Yes, NIH scientist John O'Shea may have discovered the JAK3 enzyme upon which Xeljanz turns. But Pfizer's R&D included years of early development--and a 5,000-patient Phase III trial, not an inconsiderable expense, the company says.

"It was the culmination of this work undertaken by Pfizer that led to the drug now known as Xeljanz," the company said in a statement.

Apparently, the crux of Wyden's argument is that O'Shea and Pfizer collaborated on JAK3, under a cooperative R&D agreement set up in the '90s. As the NYT reports, NIH policies in the early part of that decade required drug prices to reflect the government's investment in a collaborative product. But that policy changed in 1995, and Pfizer's collaboration was set up in 1996 under the new rules.

- check out Wyden's letter
- see Pfizer's statement
- read the NYT story