Biotech Values

[zipjet]

A discount of that magnitude might make sense for VA hospitals insofar as: i) the entire VA system is governed by a single negotiation; and ii) in contrast to Medicare, the VA is contractually entitled to the lowest drug price given to any buyer.

OK

But as a discount to what? To what the VA formerly paid? I don't think so.

Making a comparison of what the VA is paying for L to drugstore.com pricing of mL is not a fair comparison. Nor is it a fair comparison if in fact Sandoz quoted pricing to the VA that was intentionally non-competitive because of a decision to sell for higher prices to others since their capacity is constrained.

This all comes back to profit maximization in a duopoly where one competitor is production constrained.

I think in the end, the market split will look much more rational than some of the pricing comparisons that are floating around.

ij