Pharmaserve?

[rfogel]

I happened to notice someone on stocktwits mention that he had a call from "Pharmaserve" warning him of a possible insulin shortage due a run on the drug because of coronavirus. He argued that perhaps Mannkind could use this to their advantage.

Out of curiosity, I checked the Pharmaserve website, specifically the diabetic drugs section: pharmaserve.com/insulin-medications/

The first thing I noticed was that everything except afrezza is on their list of offerings.  Why?

The second thing I noticed were the prices they offer. For example, they offer 20 humalog kwikpens for $360. At $18 a pen,  that's about 6 cents per unit of insulin. The more affordable Eagle Pharmacy offers 90 4 unit afrezza doses for $99. That's about 27 cents a unit.  Can Mannkind ever get afrezza's price down to a point where it could compete on price?

[matt]

Mar 9, 2020 14:47:34 GMT -5 rfogel said:

Can Mannkind ever get afrezza's price down to a point where it could compete on price?

I think the answer to that is a big no.  Lilly and Novo produce huge quantities of recombinant insulin in-house or with a dedicated contract manufacturer working on a "cost plus" basis, while MNKD has to buy insulin from Amphastar who is making a profit from that relationship.  If MNKD had 100,000 scripts per week that could change, their options for cheaper insulin would improve, but for now they have a cost disadvantage on the most critical component.  Add to that the cost of the FDKP delivery particles, the need to combine insulin with the carrier, and the packaging into the unit dose canisters and there is an inherent cost disadvantage.  At large enough volumes, the differential will not be so large but the difference will always be there.

For reference, the "factory price" of recombinant insulin from some providers in Brazil is lower than half a cent per unit (a 1,000 unit vial is less than US$4.70).  That Brazilian company is a non-profit manufacturer that doesn't need to keep shareholders happy, but it gives you an idea of how cheaply recombinant insulin can be manufactured in bulk.  While I expect that Lilly and Novo cannot make their insulin so cheaply given higher US prices for labor and overhead, but I doubt their insulin production cost reaches a penny per unit.  This puts them in a position where they can always price their RAA cheaper than MNKD's production cost, and at that point Lilly and Novo would still be making money.

Afrezza is not a product that will ever sell on price alone; it has to be a combination of reducing cost from the present level and demonstrating superior benefits.

[goyocafe]

If you are signed up for notices from Afrezza.com, you likely received an email message similar to this over the weekend. So whatever MNKD doesn't have going for them, a shortage isn't one of them.

Dear XXXXXXXX,

We know that access to your diabetes supplies, including Afrezza®, is top-of-mind, especially during global uncertainty.


We do not anticipate any shortages in the supply of Afrezza due to the Coronavirus.




STABLE SUPPLY OF AFREZZA





MannKind sources critical raw materials from suppliers in the United States (US) and Europe, and our US manufacturing plant is fully operational; we are confident supplies for Afrezza will not be affected.



Pharmacies may continue to order supplies, with expected delivery to your local pharmacy within 1-2 days, as usual.



As the global situation evolves, we will continue to take the steps necessary to safeguard the reliable supply of Afrezza.





HOW SHOULD I PREPARE?





There's a lot of information swirling on the news, and just like any emergency prep, it's best to make a plan, rather than panic. You'll want to work with your doctor, just as you would for a traditional sick day plan during flu season.





Thinking through your plan could double as emergency preparedness you've been putting off! You can consider having at least a week's worth of extra food, medicines, and diabetes supplies on hand, in case you need to stay home.



You can follow the ADA's guidance here: Planning for Sick Days & the Coronavirus and Tips for Emergency Preparedness






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