Price Cap PR

Price Cap PR
<http://www.forbes.com/business/2006/10/12/cancer-drug-pricing-biz-cz_mh_1012drugs.html>

excerpt
The news that Genentech is going to make an effort to control prices could
further hurt its shares. Investors have been giving the company a tepid
reception of late as sales of its cancer drugs have grown more slowly than
many hoped. In a note to investors this morning, Jim Reddoch at Friedman,
Billings, Ramsey wrote that the price cap is "good P.R.," but that it also
makes him less likely to believe there will be upside for Avastin sales in
lung cancer.

Still, Saltz says, the cost of such cancer drugs is a reminder that the
newer medicines have not lived up to their early potential. Only Gleevec,
from Novartis (nyse: NVS - news - people ), has fulfilled the promise of
curing many patients with relatively mild side effects.

"All of these targeted cancer drugs are failures compared to what we
thought we'd be able to do with these drugs," Saltz says. "In most cases,
they work only in a small percentage of patients, and they don't work well
enough to replace older therapies, so they're added to them. Nobody set
out to develop Avastin or Erbitux or Vectibix to add them to the
chemotherapies we had."

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