Moving to ignite a price war, Swiss health-care company Roche Holding said Monday that its new drug for hepatitis C will be priced 43% below a competing product made by Costa Mesa-based Ribapharm Inc.
Roche said its drug, Copegus, will be launched this week with a wholesale price of $5.06 per 200- milligram tablet, which was the list price of Ribapharm's drug ribavirin in 1998.
Schering-Plough Corp. markets ribavirin, which is used in combination with Schering's Peg-Intron interferon to treat chronic hepatitis C. Royalties from Schering accounted for all of Ribapharm's $186.4 million in revenue for the nine months that ended in September.
Ribavirin also accounts for 25% of the revenue at ICN Pharmaceuticals Inc. The drug has been at the center of a nasty battle between ICN, also based in Costa Mesa, and Ribapharm, which wants ICN to spin off its 80% stake in Ribapharm.
Representatives of ICN and Ribapharm couldn't be reached Monday for comment. The wholesale or list price often is higher than the discounted price drug makers offer to large purchasers such as managed-care organizations. Such discounts can be 5% to 15%.
Roche's announcement came after the markets closed. In after-hours trading on the New York Stock Exchange, Ribapharm shares sank as low as $6.67 from its close of $7.50, and ICN rose 2 cents to $12.79 from its close of $12.77. Schering-Plough dipped as low as $23.31 after closing at $23.68.
Roche is selling Copegus with its own interferon, called Pegasys, for treatment of chronic hepatitis C.
An estimated 2.7 million Americans are chronically infected with hepatitis C, which can cause liver damage.
This month, Roche settled a patent dispute with Ribapharm and ICN in which Roche agreed to pay an undisclosed royalty to Ribapharm.
Roche developed Copegus on its own, but the drug has the same active ingredient as ribavirin.
Pegasys is a once-a-week injectable version of the antiviral protein interferon, while Copegus is a pill administered twice a day.
For patients prescribed 1,200 milligrams of ribavirin a day, the wholesale price savings with Copegus would be about $7,600 for 48 weeks of therapy, Roche said.
Roche has forecast that Pegasys -- a crucial earnings driver -- would have peak annual sales of about $1 billion as a stand-alone therapy or in combination with Copegus.