Modifying Commerce Cart Before Display
The best and cleanest way to achieve what you want is with a product pricing rule and a custom action with what you have above. That way it goes through the normal Commerce hooks. You just create a rule reacting on "Calculate the sell price of a product."

If you only want the rule to fire on cart and checkout pages, you can also create a custom condition that checks your current path (or there might be a module that adds that condition for you.)

So instead of a hook_form_alter, you want to declare a hook_rules_action_info().