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Post by Thundersnow on Mar 14, 2023 15:22:14 GMT -5
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Post by letitride on Mar 14, 2023 22:40:01 GMT -5
Drop on select product next year much like Lilly end of year. These are not in competition with afrezza and still nine months out. Pumps are still not free. So to me it looks like they are making it possible for T1 and T2s to survive on a budget but but not comfortably. And certainly not with TIR in mind without alot of work and careful diet.
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Post by longliner on Mar 14, 2023 22:43:24 GMT -5
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Post by porkini on Mar 14, 2023 22:57:04 GMT -5
Paywall? I can't see it...  |
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Post by longliner on Mar 14, 2023 23:37:28 GMT -5
Paywall? I can't see it... By dropping the cost of its Humalog and Humulin insulins, Lilly could sidestep $430 million per year in new Medicaid rebates and make more than $85 million in new annual profit, according to an analysis by Spencer Perlman, the director of health-care research at Veda Partners.10 hours ago This is it in a nutshell. Sorry about that. |
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Post by agedhippie on Mar 15, 2023 17:14:40 GMT -5
Paywall? I can't see it... By dropping the cost of its Humalog and Humulin insulins, Lilly could sidestep $430 million per year in new Medicaid rebates and make more than $85 million in new annual profit, according to an analysis by Spencer Perlman, the director of health-care research at Veda Partners.10 hours ago That's correct. A slightly longer explanation from the research paper ( here) is that a drug company has to rebate the greater of 23% or the difference between the list price and the best price a PBM pays, plus an addition for the amount the price rises above inflation to CMS on Medicaid revenue. Currently that is capped at 100% of the list price and the big three insulin manufacturers all hit that cap. As of the start of next year that cap is removed and so they will be rebating a fair bit more than the list price of the drug. The example the chose in the paper was Humalog. The list price is $274, and the best price is about $66 (all these numbers are approximate, but the reasoning is sound). That gives a rebate of 274-66 = $208 plus an inflation rebate of $234 for a total rebate of $442. The current cap limits that to 100% of the list price and so while Lilly make no profit they avoid the full $442, but that changes next year when their rebate cost would jump from $234 to $442. How can they avoid this? By reducing the price to $66 they now pay the 23% rebate, since that is the greater, which is $15 and the inflation rebate drops to $26 for a total rebate of $41 which gives a margin of $25, or 37%. After the price reduction the revenue next year will be $156M so they jump from a revenue after rebate of $0 to $56M. Novo Nordisk and Sanofi are in the same position which is why Novo Nordisk reduced their prices, and Sanofi will reduce their prices at some point before next year. |
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Post by uvula on Mar 15, 2023 17:51:59 GMT -5
So they make more money by lowering the price? Sounds like magic.
Are the PBMs the big losers here?
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Post by peppy on Mar 15, 2023 18:20:13 GMT -5
From agedhippie post two above. "The example the chose in the paper was Humalog. The list price is $274, and the best price is about $66 (all these numbers are approximate, but the reasoning is sound). That gives a rebate of 274-66 = $208 plus an inflation rebate." aged, are you telling me the PBM's rebate on a $274 dollar vila of Humalog is $208 dollars? I am asking, am I miss understanding? |
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Post by agedhippie on Mar 15, 2023 22:08:42 GMT -5
Yes, the PBMs are the big losers because they cannot show a big reduction in cost to the insurer so they have to go back to what they are paid for - managing pharmacy benefits.
With Medicaid the pharma pays the rebate, today that is the whole cost of the drug (208 + 234 which is capped at 100% of cost so $274. Next year that cap is removed so they would have been rebating $442 on a $274 drug. Hence they have to reduce their prices to avoid that fate, and as a bonus they actually get to make money for once. The obvious question is why didn't they do this years ago? The answer (I think) is that the old price was very beneficial from the POV of tying in the commercial PBMs, plus Medicaid generated a $650M cashflow and that's effectively an interest free loan.
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Post by peppy on Mar 16, 2023 5:24:46 GMT -5
Yes, the PBMs are the big losers because they cannot show a big reduction in cost to the insurer so they have to go back to what they are paid for - managing pharmacy benefits. With Medicaid the pharma pays the rebate, today that is the whole cost of the drug (208 + 234 which is capped at 100% of cost so $274. Next year that cap is removed so they would have been rebating $442 on a $274 drug. Hence they have to reduce their prices to avoid that fate, and as a bonus they actually get to make money for once. The obvious question is why didn't they do this years ago? The answer (I think) is that the old price was very beneficial from the POV of tying in the commercial PBMs, plus Medicaid generated a $650M cashflow and that's effectively an interest free loan. Tell me where my thinking is wrong, all. Pharmacy purchasing managers will be paying the manufacturers 66 dollars/vial and receive a co-pay of 35 dollars from the insured? Will there be additional rebates from the manufacturers to the Pharmacy purchasing manager for hitting certain script goals/numbers? If costs were equal, does the above curb the pharmacy purchasing managers objections to afrezza scripts? As in why would they care? If afrezza cost the pharmacy purchasing managers 66 dollars for say a 4 unit package, would the objection so Afrezza prescriptions go away? Any way the above can help MNKD script numbers? |
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Post by hellodolly on Mar 16, 2023 8:47:09 GMT -5
Yes, the PBMs are the big losers because they cannot show a big reduction in cost to the insurer so they have to go back to what they are paid for - managing pharmacy benefits. With Medicaid the pharma pays the rebate, today that is the whole cost of the drug (208 + 234 which is capped at 100% of cost so $274. Next year that cap is removed so they would have been rebating $442 on a $274 drug. Hence they have to reduce their prices to avoid that fate, and as a bonus they actually get to make money for once. The obvious question is why didn't they do this years ago? The answer (I think) is that the old price was very beneficial from the POV of tying in the commercial PBMs, plus Medicaid generated a $650M cashflow and that's effectively an interest free loan. Tell me where my thinking is wrong, all. Pharmacy purchasing managers will be paying the manufacturers 66 dollars/vial and receive a co-pay of 35 dollars from the insured? Will there be additional rebates from the manufacturers to the Pharmacy purchasing manager for hitting certain script goals/numbers? If costs were equal, does the above curb the pharmacy purchasing managers objections to afrezza scripts? As in why would they care? If afrezza cost the pharmacy purchasing managers 66 dollars for say a 4 unit package, would the objection so Afrezza prescriptions go away? Any way the above can help MNKD script numbers? I'm as naïve as it gets when it comes to the distribution channel and the benefits. If I'm reading this correct, the PBMs could potentially see more profit in Afrezza and act as a catalyst by pushing Afrezza over other products where they no longer make the same profits? Seems to me that was the argument before they went to $35 insulin, that is Afrezza was not profitable enough to interest them? |
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Post by uvula on Mar 16, 2023 8:54:29 GMT -5
So mnkd might lose money on each rx but the number of rxs might increase?
A month ago we were finally optimistic and now we are back in our usual mnkd funk.
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Post by hellodolly on Mar 16, 2023 9:06:00 GMT -5
So mnkd might lose money on each rx but the number of rxs might increase? A month ago we were finally optimistic and now we are back in our usual mnkd funk. I think the optimism, at least from my POV was on Tyvaso growth. That remains strong. I don't recall much optimism on Afrezza other than breaking 1000 wkly but, that's not going to be anything more than a Rx milestone. |
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limo
Researcher
Posts: 82
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Post by limo on Mar 16, 2023 9:18:56 GMT -5
www.cms.gov/files/document/medicare-drug-price-negotiation-program-initial-guidance.pdfOn page 8 it says “For drug products, all dosage forms and strengths of the drug with the same active moiety and the same holder of a New Drug Application (NDA)4 , inclusive of products that are marketed pursuant to different NDAs” will be identified as a single source drug. So this would suggest Wegovy & Rybelsus (no drugs are mentioned) would be treated for negotiation as though they had a 2017 approval date (when ozympic was approved) and not 2021 (when wegovy was approved) and therefore up for for negotiation earlier (9 years after approval). However, Wegovy is currently not reimbursed by Medicare so this has no impact on that drug’s current outlook. It could potentially affect Rybelsus but only if sales through Medicare are large enough to warrant putting it on the list. I think this makes Afrezza attractive as a target asset.
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Post by cretin11 on Mar 16, 2023 9:24:27 GMT -5
A few years ago the idea of selling off Afrezza would’ve been offensive to me. Not so anymore. If MNKD could negotiate favorable sales terms (questionable I realize), then do it and get Afrezza under the control of someone who can competently commercialize it. Good for PWDs, good for MNKD shareholders. But yes, a lot of “ifs” there, so that’s a long shot.
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