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Post by ktim on Feb 28, 2020 16:13:57 GMT -5
mattLooking at history of COGS vs revenue over time to model fixed vs variable, what's your estimate of variable avg cost per current "script" (whatever the mix of scripts is)? And what would the comparable RAA be?
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Post by rfogel on Feb 28, 2020 16:17:04 GMT -5
This analogy is all very well, but we are five years down the line from launch now and if word of mouth was going to do the trick in the Type 1 community it would have caught on by now. You are correct about PWD only listening to other PWD (the assumption is that everyone else is trying to either sell them something or tell them how to run their lives - both sensitive topics), but the rider to that is that PWD do not expect that something that works for one PWD will necessarily work for them. Contrary to the idea that is often promoted here it is quite possible to get an A1c in the 5s on RAA with a high TIR (Shawn who posts here is an example), it's just that most people (me included) don't want to have that level of engagement with their diabetes and compromise. Most PWD totally ignore their physician's opinions? Call me an oddity but I primarily rely on my doctor's opinion and authoritative sources such as Mayo... or rarely dig into scientific publications myself. Hardly ever put much weight on what lay people say... though I nod and thank them for their kind advice. I wouldn't necessarily assert that PWD "ignore their physician's opinions," but from reading the tudiabetes forum, I would say they seem to rely a lot on the advice they get from other diabetics. |
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Post by buyitonsale on Feb 28, 2020 17:16:03 GMT -5
It's all about sum of the parts.
Afrezza growing sales in US + Afrezza growing sales in Brazil + Afrezza sales in India starting in 2021 + royalties from TreT starting in 2021/2022 = profitable quarter is 18 to 24 months away.
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Post by ryster505 on Feb 28, 2020 17:32:06 GMT -5
Pricing is an issue that will never go away. It simply costs more to make Afrezza than other insulins, partly due to the fact that they purchase insulin from a third-party that needs to make a profit, and partly because the FDKP particles used in the Technosphere delivery system add to the cost. Even if MNKD were to lower prices to the point where they were selling Afrezza simply to recoup the variable cost of production, Lilly and Novo could price their RAA products at the same level and they would still be making money due to their greater economies of scale and their lower cost for recombinant insulin. That is an impossible competitive position. Until and unless MNKD can demonstrate conclusively the long-term economic benefits of Afrezza over the competing RAA products, they will be at a serious competitive disadvantage. A superior product can garner a premium price, but the medical world is not convinced by the evidence offered to date. It is going to take a large and medium to long-term head-to-head trial of Afrezza vs the other insulins to prove the value, and I am not sure MNKD can afford to do such a trial. Hopefully at some point down the not too distant road, a large study will take place and be funded through grants or a partner. This should have been done ages ago...Look the success of Amarin for example now that they finished their trial and the results they showed and KNEW they would show. Mannkind just never had the balls to take on such a study, nor the patience..... |
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Post by slugworth008 on Feb 28, 2020 18:09:05 GMT -5
Cost would not be as much of an issue if we could show how much money can be saved by reducing hypo events and other adverse costly side effects of the disease. Kendall anyone?
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Post by letitride on Feb 28, 2020 18:47:56 GMT -5
I believe the the end game here is people that can afford it will afford it because its life changing for a Type1. With pediatric approval Ins may be easier to come by because thousand of angry mothers may demand it. And if the insurance companies are already getting buried in PAs imagine thousands of mothers on them as well. Just maybe MC has got game here?
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Post by bones1026 on Feb 28, 2020 22:23:00 GMT -5
Cost would not be as much of an issue if we could show how much money can be saved by reducing hypo events and other adverse costly side effects of the disease. Kendall anyone? I think this is exactly it as far as insurance. TIR and no hypos will drastically reduce the amount insurers pay for limb amputation and so many other ramifications from this terrible disease |
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Post by sayhey24 on Feb 29, 2020 7:25:11 GMT -5
The reason why this product has never gained any traction it’s too costly for the type one and type two diabetics. insurance companies our unwilling to pay the high price for such a good product. If the company is to survive the market the product it will have to be a total paradigm shift in the way that Afrezza is marketed. While none of us know what the cost of goods to produce Afrezza might be. We know it’s priced very high equal to the best selling insulin drugs on the market. If you want to get on a better schedule you need to cut the price 50% and hope that you don’t go out of business while you try to build a new base of users. show the pharmaceutical industry that you’re prepared to take it directly to the consumer with good pricing. The Board of Directors needs to look carefully how to change this dynamic. with our current pricing we will never make the right schedules to be an every day non-boutique drug for Medicare, Tricare,even Medicaid. Formularies are chosen by the insurance companies based on prices and Afrezza is priced too high to make the cut. Evidenced by the fact that we keep hearing the complaint that we get new initiations but people cannot stay on Afrezza. Time for the drastic paradigm shift and make this a product Affordable for all. Selling in other markets like Brazil and India may prove this case. If I were a T1, which I am not and I was having one of those days where my BG zoomed out of control and I was fighting to get things back in control I would not think twice about buying afrezza for cash and having a rescue supply. At these prices I can think of a lot worse things to spend my money on. insulinsavings.com |
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Post by prcgorman2 on Feb 29, 2020 10:29:36 GMT -5
Pricing is an issue that will never go away. It simply costs more to make Afrezza than other insulins, partly due to the fact that they purchase insulin from a third-party that needs to make a profit, and partly because the FDKP particles used in the Technosphere delivery system add to the cost. Even if MNKD were to lower prices to the point where they were selling Afrezza simply to recoup the variable cost of production, Lilly and Novo could price their RAA products at the same level and they would still be making money due to their greater economies of scale and their lower cost for recombinant insulin. That is an impossible competitive position. Until and unless MNKD can demonstrate conclusively the long-term economic benefits of Afrezza over the competing RAA products, they will be at a serious competitive disadvantage. A superior product can garner a premium price, but the medical world is not convinced by the evidence offered to date. It is going to take a large and medium to long-term head-to-head trial of Afrezza vs the other insulins to prove the value, and I am not sure MNKD can afford to do such a trial. Hopefully at some point down the not too distant road, a large study will take place and be funded through grants or a partner. This should have been done ages ago...Look the success of Amarin for example now that they finished their trial and the results they showed and KNEW they would show. Mannkind just never had the balls to take on such a study, nor the patience..... You think Mannkind didn’t take on a large-scale trial because of a lack of courage? Interesting. Mannkind didn’t want to take on marketing of Afrezza in any form at all. That is why they signed a world-wide marketing deal worth more than $1,000,000,000 with one of the 3 largest insulin manufacturers on the planet. Sanofi was to take on the work of the large-scale clinical trial. The term “large-scale” should also imply to you, other terms such as complex, challenging, time-consuming, and expensive. Mannkind may fear they smply do not have the resources but it is hubris to suggest they are afraid of a large-scale clinical trial to prove superiority. I am comfortable the trial(s?) will happen when the resources, especially capital, are available. The old saying, “It takes money to make money” is not a platitude. McDonald’s started with a single restaurant. So did KFC. You have to start somewhere no matter how appealing your product is. Mannkind was forced into marketing Afrezza. In a way, this may actually have been a blessing to MNKD shareholders because now 100% of the profit will go to them instead of mostly to Sanofi shareholders, albeit with a significant delay. As Mannkind approaches cash flow break even, the cost of borrowing will significantly reduce and that may be the earliest opportunity to fund the trial(s?) [and the PBM discounts?] that may ignite the afterburners for take-off. |
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Post by prcgorman2 on Feb 29, 2020 10:36:52 GMT -5
Cost would not be as much of an issue if we could show how much money can be saved by reducing hypo events and other adverse costly side effects of the disease. Kendall anyone? I think this is exactly it as far as insurance. TIR and no hypos will drastically reduce the amount insurers pay for limb amputation and so many other ramifications from this terrible disease I agree with both you and slugworth. There is more than one way to lower cost as a barrier to adoption. There have been threads which explored the actuarial aspect in terms of proving overall benefit to the insurance company for paying for a more expensive therapy which can demonstrate better outcomes. This is true on the face of it, but I am persuaded that the analysis horizons are often not sufficiently generous. So I agree and I do think it is true and I do assume it will eventually prove out that way, but I do not believe there is not yet sufficiently convincing to Endos, the FDA (think ultrarapid label), and actuarials to garner the desired Tier 1 formulary placement. |
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Post by agedhippie on Feb 29, 2020 10:57:05 GMT -5
If I were a T1, which I am not and I was having one of those days where my BG zoomed out of control and I was fighting to get things back in control I would not think twice about buying afrezza for cash and having a rescue supply. At these prices I can think of a lot worse things to spend my money on. insulinsavings.com It means getting a prescription which means a whole discussion with your endo and the risk of losing the prescription to your usual insulin. This is one of those cases where samples help as if your endo will play ball they can give you a sample , and if the person likes the outcome they may well move to Afrezza. There is a reason why drug dealers give out samples... |
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Post by agedhippie on Feb 29, 2020 11:02:52 GMT -5
I agree with both you and slugworth. There is more than one way to lower cost as a barrier to adoption. There have been threads which explored the actuarial aspect in terms of proving overall benefit to the insurance company for paying for a more expensive therapy which can demonstrate better outcomes. This is true on the face of it, but I am persuaded that the analysis horizons are often not sufficiently generous. So I agree and I do think it is true and I do assume it will eventually prove out that way, but I do not believe there is not yet sufficiently convincing to Endos, the FDA (think ultrarapid label), and actuarials to garner the desired Tier 1 formulary placement. The analysis horizons are limited to the insurers exposure risk. Once you are off their books all future costs are someone else's problem so their focus is the short term. That's a factor of the US medical system. In nation health systems the analysis is from cradle to grave so long term outcomes do matter. The NHS, for example, evaluates impacts and costs over the patients life time, but they require trial data to calculate that value. |
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Post by ktim on Feb 29, 2020 19:10:23 GMT -5
Most PWD totally ignore their physician's opinions? Call me an oddity but I primarily rely on my doctor's opinion and authoritative sources such as Mayo... or rarely dig into scientific publications myself. Hardly ever put much weight on what lay people say... though I nod and thank them for their kind advice. I wouldn't necessarily assert that PWD "ignore their physician's opinions," but from reading the tudiabetes forum, I would say they seem to rely a lot on the advice they get from other diabetics. That would certainly seem correct. I would imagine polling people that have sought out a forum to discuss with other patients would uncover that they are interested in those other patients views. It's called selection bias. What fraction of diabetics do you think participate in tudiabetes forum? I wouldn't dismiss peer opinion being important, but I do think a large segment of the population rely primarily on their physicians. |
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