Ciba-Geigy Cuts Habitrol Price

Ciba-Geigy has agreed to cut the average wholesale prices for its Habitrol (nicotine) smoking cessation patch by 8.5% in Canada and will also pay the Canadian government C$2.9 million ($2.1 million). The settlement is the biggest yet achieved by Canada's Patented Medicine Prices Review Board, which ensures that companies price their drugs in accordance with guidelines set up by the PMPRB.

Ciba-Geigy has reportedly been selling Habitrol for between 7.2% and 17.5% more than the maximum allowable price. The company charged C$3.71 per patch when it first started selling the drug in 1992, and this has now been reduced to between $3.16 and $3.31 per patch, effective from January 1, 1995.

The PMPRB based its assessment of the price of Habitrol on the cost of other smoking cessation products on the market, and started its proceedings against Ciba-Geigy in November 1993. The case has gone on so long because Ciba-Geigy initially argued that the Board did not have jurisdiction to review the price of Habitrol, because the patents on which it is based do not pertain to a medicine. This is the first time that a company has taken a dispute over drug pricing with the PMPRB to the public hearing stage.