I 100% agree that there should be an option for a user to be able to cancel or go back rather than be forced to just save a draft. The following links are to iOS Human Interface Guidelines and Android Design Principles in an effort to support this arguement:
iOS Human Interface Guidelines (Navigation) - https://developer.apple.com/library/ios/documentation/UserExperience/Conceptual/MobileHIG/Navigation.html
Android Design Principles - http://developer.android.com/design/get-started/principles.html
Firstly I want to reference the iOS Guideline of:
Users should always know where they are in your app and how to get to their next destination.
Although this is referencing an app, the same principle can be applied to a multi-paged form. As a user is going through a multi-paged form they will be learning more about the context and intent of what the form is about based on the questions asked. During this process a user could quite easily discover that they filled out information incorrectly on a previous page. With the ability to go back to the previous page being very common across web browsers and mobile devices, a user will attempt to go back to the previous page in the form. Now I'd like to reference an Android Design Principle of:
Decide for me but let me have the final say - Take your best guess and act rather than asking first. Too many choices and decisions make people unhappy. Just in case you get it wrong, allow for 'undo'.
Though your developers are proposing a decision for the user in "Save Draft", you are not letting the user have the final say. With a user knowing that they've made a mistake on the previous page and the user having previous experience of being able to "back" in forms and pages on other websites, this would create a very frustrating user experience.
My recommendation would be to include the 'Back' button, but have the functionality in the background that would also act as the 'Save Draft' functionality. This would allow a user to not only go back to a previous page, but retain any information they've already entered on that page.