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Post by suebeeee1 on Jun 16, 2015 8:26:04 GMT -5
Once a postaholic, always a postaholic. I admit I have a problem... only 11 more steps  Yes, but do you REALLY want to stop being a postaholic? |
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Post by mnholdem on Jun 16, 2015 12:41:36 GMT -5
... I am an avid Chess player, and part of the game is to think ahead to not only what my next 10 moves may be, but also my opponents. - Sanofi has seemed to price Afrezza higher than what was implied would be done by MNKD management before they were signed on as a partner. It appears that it is at a premium to rapid acting SC's. Since MNKD implied that it would be comparable to SC's it seems reasonable to assume that the manufacturing costs would allow it to be... in fact the simplicity of the device may mean it is actually cheaper compared to injection pen. So that leaves a few reasons Sanofi would decide to price high... 1) they anticipate that getting good formulary placement will be difficult and consider Afrezza a niche product and therefore need to get as much as possible over a smaller patient pool or 2) they believe that the clinical benefits of Afrezza are so compelling that they will get preferred formulary status and a higher price (jackpot for Sanofi and us investors) or 3) the higher price is simply a bargaining chip that is used as part of the negotiating strategy with insurers/PBM in the tactical dance of negotiation. I don't believe #1 is the case. #2 could be good for SNY and MNKD shareholders in long run, but it also could lead to delays in formulary progress... and thus opportunity for shorters to sell the idea that something is wrong. I trust that Sanofi knows what they are doing and is playing this to maximize long term value for themselves, and subsequently for me. The current premium Afrezza is charging - and then discounting - for Afrezza is absolutely, 100% a bargaining chip. You watch, they'll offer to lower the price as part of their dealings to obtain a Preferred / Tier 2 rating for Afrezza. The beauty of this strategy is that, even after it is lowered, Afrezza will still maintain a very lucrative profit margin AND the price for Afrezza will be comparable to the competition's... as previously stated by management.
Sanofi has been thinking several moves ahead, and it's very much a chess match with $billions at stake.
Oh, and daduke: I'm 50/50 on the idiot thing (just kidding, pal).
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Post by dreamboatcruise on Jun 16, 2015 13:58:17 GMT -5
mnholdem... I'll have to admit I don't have a lot of insight into how negotiations occur for formulary placement. I've done a lot of negotiating in other sectors, but that one is pretty unique. Perhaps this is one of those things where they use steeper discounting to attract early movers. They set a higher base price and for the insurers willing to jump on board with better formulary early, they offer to drop price to comparable to standard RAA. For the holdouts, SNY figures that once the clinical evidence for better outcomes and subsequent deluge of patient demand manifests, they will no longer have to offer the discount and the late adopters will be forced to pay a premium. Don't know if that sort of thing happens, but in a free market it seems plausible.
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