Written by Tracy Staton (FiercePharma.com)

Valeant Pharmaceuticals (VRX), one of the most obvious price-hiking offenders of the last couple of years, has just unveiled the sticker on its new psoriasis drug, Siliq—and it’s the lowest in the market for next-gen meds.

At least that’s what Valeant said Friday in announcing a $3,500-per-month list price for the med, acquired from AstraZeneca (AZN) and approved by the FDA earlier this year. Makes sense, too, given that Siliq will be going up against first-to-market Cosentyx, one of Novartis’ (NVS) most successful launches, and Taltz, rolled out by Eli Lilly (LLY) in 2016.

Valeant’s in-class rivals haven’t publicly quoted hard numbers on their drugs, which are IL-17 blockers, a new type of therapy competing with the long-established TNF-alpha drugs, including as AbbVie’s dominant Humira and Amgen’s Enbrel. Novartis did say in launching Cosentyx that it would be priced “on par” with Johnson & Johnson’s IL-12/IL-23 inhibitor, Stelara, which ran about $7,661 per injection at the time, or about $46,000 for the initial year of therapy. At $3,500 per month, Siliq's annual cost would be $42,000.

Of course, list prices aren’t the net prices to payers. Those are negotiated, with rebates and discounts that cut into retail cost considerably these days. And with multiple competitors in a particular class, payers have the opportunity to pit rival drugmakers against each other for better deals. To wit, Novartis negotiated an exclusive formulary deal with Express Scripts for 2017, leaving Eli Lilly’s med out in the cold.

Valeant has another reason to undercut its rivals on Siliq, too. The drug’s FDA-approved label includes a black-box warning, the agency’s most serious, noting that Siliq patients have “completed suicides.” The drug also comes with a risk-management program—or REMS—that “appears onerous,” Evercore ISI analyst Umer Raffat wrote when the med was approved.

Cosentyx and Taltz aren’t saddled with similar safety warnings., and the prospect of competing on that footing apparently scared off Siliq’s original developers, Amgen and AstraZeneca; Amgen handed back rights to AZ when the suicide risk cropped up in trials, and AstraZeneca unloaded the med to Valeant.

Doctors were already looking askance at the warnings before approval, Wells Fargo analyst David Maris said in February. More than 50% of respondents to his doctor survey said they’d use Siliq only after patients failed on three other regimens, an approach that would shrink Siliq’s patient pool considerably.

Valeant’s pricing move, if followed up with similar moves with payers, could push doctors toward a different approach, however. If the reimbursement gatekeepers give Siliq preferred status, then doctors and patients may have to clear new hurdles to get their scripts paid for.

Novartis and Lilly aren’t likely to let Valeant to steal share without a fight, though. David Epstein, who headed up Novartis’ pharma unit when the Swiss drugmaker initially priced Cosentyx, expected a pricing war in the field (At the time, Amgen was holding the brodalumab reins) telling Bloomberg at the time:

”When Amgen launches and Lilly launches, assuming they do, that will give payers more leverage to negotiate price discounts, and I think that's exactly what's going to happen.

Hopefully in the time between now and then we will have established a physician community and a patient community that likes our product. We will then fight with them for market share, even if there's pricing pressure."