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The Bully Pulpit in Action: Cipro and Zevalin

 
• By Michael McCaughan

Former HHS Secretary Thompson's negotiation of a price discount on Bayer's antibiotic Cipro during the anthrax scare of 2001 is everybody's favorite example of price negotiation in action. The real lesson of that case, though, is that negotiation can pay off for manufacturers. For a less rosy example, consider Biogen Idec's experience with Zevalin.

Democrats have a favorite example of the power of the Secretary of Health & Human Services to negotiate lower drug prices: former Secretary Tommy Thompson’s agreement with Bayer AG to increase the US government’s stockpile of ciprofloxacin (Cipro) in response to the anthrax attacks in October 2001.

Thompson and Bayer agreed to a contract under which Bayer would sell HHS 100 million units of Cipro for $0.95...

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