Is that Fuzzy Thinking, JP?

Jp Enlarged

Doctor Zhivago rip I am not an economist. This is hypothetical. I will take a real figure and a real policy and
I am going to draw conclusions that people with a vested financial interest will argue against. They would rather I not say such things.

This is about automatic shipments of new pharmaceuticals. Recently, it was 3 pieces of Symbicort. $437.51 worth. Automatically shipped to the store.

There are about 55,000 pharmacies in the USA. Times $437.51 = $24,063,000.00.
This is an inhalation product, so the cost to manufacture is more than tablets. We all have a good idea of what pharmaceuticals actually cost the manufacturers to make. (We all know also who is making the big bucks in our industry, but that is another talk we’ll have some day) Let us guess that the net net value to produce this stuff is $5.00 x 3 = $15.00.

Remember, this is hypothetical, me just having some fun. I contend that there never has to be a prescription written for Symbicort and the company will make a substantial profit.
Really. No prescriptions, nada.

Say that only half of the pharmacies remember to return the product in a timely
manner. Let’s really stretch out here and say that they go outdated, that the pharmacy will lose the entire value.

That leaves about $11,600,000.00 profit split between the company and the wholesaler without us selling one prescription. Is this fuzzy thinking on JP’s part?

We have a very small slice of the profit pie these days. That’s wrong and as long as the manufacturers can count on
mullti-million dollar paydays just to bring a drug out, our slice will stay the same.

I always hated the auto shipped medicines. They were just extra work.

11 Comments

11 Comments

  1. FDPharmD  •  Jun 16, 2007 @10:48 pm

    Okay, I LOVE auto shipped GENERICS, because we are definitely going to use them (OK, maybe not symbicort generic when it comes out, but you get the idea).

    As for auto shipped meds, there is a certain place for them if it is going to be a block buster, here are a few of the recent ones that I will be sending back soon…

    Verimyst…going back…I already have flonase on my shelf, and seriously am I going to make someone pay for a fancy sprayer…nope, get the fluticasone and deal with a slightly awkward sprayer.

    Symbicort is already in a box on its way home.

    Travatan Z…enough said

    Coreg CR (OK I will have some suckers, maybe I won’t send this one back yet, docs will have those handy free coupons, actually we got a 10mg one the other day. He will never be back for more.)

    Exubera

    Vynase

    Oh ya, where did I put that JanuMet…can’t seem to find that one…perhaps..oh wait…I sent it back.

    Coming soon:

    The new actonel take one tab on consecutive days once each month…might as well buy boniva, save you a day of sitting around waiting to eat

    The newer formulation of Fosamax + D…still have not sold the old one.

    And NDAs recently approved!(not sure if we will see them to market, but here is what we can look forward to)

    Seroquel XR

    Tovalt ODT (ODT form of ambien)

    AMRIX (Extended release cyclobenzaprine…seriouly do we really need this!)

    Altace TABLETS (what is the point, I will assume that they will remove the caps from the market and move everyone to tabs, due to the fact that there are still some sucker docs out there that think the studies they do , do not relate to the ACEIs as a whole?

    Me: can switch to lisinopril so we save this patient $100 per month so they dont hit the donut hole?

    Doc: NO, only altace can do this according to the study the drug rep gave me that was funded by their money, that lisinopril cannot give the same wonderful effects even though it does the same thing with the same side effects!

    Me: Yes it can, I am switching it anyway…thanks for nothing!

    That is my thought for the night…peace

  2. Nic  •  Jun 17, 2007 @8:31 am

    Tekturna (is that even spelled right?) is still on my shelves unopened. That new CII Vyvanse (again, spelling?) just came in a couple days ago. That’s one of the stupider ones. “Hey, let’s make a prodrug and market it that it has lower abuse potential!” Too bad the DEA/FDA doesn’t agree and made it a Schedule II anyways. Personally, I’ve been digging back in my Medicinal Chemistry textbook (yep, I did actually save it), and I think I’ve figured out how to ruin the prodrug value. For the record, I passed Med Chem with a high C, so I’m definitely not a chemist.

    Verimyst came in the other day. I’m waiting for a script just so I can see if insurance will pay for it or not. Fluticasone fumarate vs. fluticasone propionate. Oh, and the nifty little side button sprayer because the traditional one is SO difficult to use.

    Fosamax D doesn’t make any sense to me. The whole reason it has to be taken on a completely empty stomach with just water and no other meds is so that it can actually have that 5% absorption figure. Doesn’t it defeat the purpose to combine D in the tablet? Following company directions, won’t the D somehow counteract the Fosamax itself?

    Wait, ODT Ambien? Geez, because regular and CR aren’t enough. Those tablets are so small to begin with. Is the ODT for the people who are too lazy to swallow a tablet?

    I sound bitter. I’m really not, I’m just frustrated with all the money being poured in to marketing slightly different variations instead of novel new drugs.

  3. clarkpharm2  •  Jun 17, 2007 @11:13 am

    Being in a hospital environment, we don’t do the
    auto-shipment thing; we are loosely controlled by an “open formulary” system that virtually
    rejects the old-whore/new-dress phenomenon so
    common at retail. When one of the “new” brands
    or styles are prescribed, the first patient
    may not receive it as I will work with the MD
    to see if this is an experiment or just a whim.
    Common sense quite often rules. What each retail
    owner has to decide is: does he want to “lose” that first Rx, and all that such a loss entails?
    Does he want to tie up ca$h in inventory? But, as far as the mfr making a bundle off an initial shipment of a NEW ENTITY: not likely.
    There’s the marketing costs, the “free samples”,
    paying for that new production facility in
    Swaziland, the coupons, the TV ads(how much DOES that beaver get paid anyway? Honest Abe did it for free, I’m told), the FDA process/bribe, and the many gazillions for the lawyers and prominent MDs that produce(from a “grant”)a ground-breaking airtight research article that PROVES that this new product is TWICE as good as prunes or whatever. Unless you’re REEELLY busy, it would seem that non-blockbuster drugs could be held to one SKU per auto-shipment. It’s actually just “insurance” in pill form, right? Pay your invoice, and wait and see……….
    50,000 RETAIL pharmacies in USA? Wow,
    where have I been? That’s a lotta galley slaves!
    Happy Father’s Day, to those who lay claim to
    offspring.

  4. vicodinfairy  •  Jun 17, 2007 @8:35 pm

    Autoship is evil. Our problem is, some dumb prescriber is going to write for this stuff…they always do. For their Medicaid patients. Then the fun begins.

    The Vynase makes me laugh becuase it’s what? Lisdexamphetamine? Sounds like a reading disorder:)

    Still, I know we’ll get scripts for it…we get them for Opana SR!!

  5. thugandascholar  •  Jun 18, 2007 @10:44 pm

    We had a rep in today saying we can get a $170 rebate if we order all strengths Vynase..we passed.

  6. RJS  •  Jun 19, 2007 @2:36 pm

    It’s not fuzzy thinking, no. But you certainly didn’t factor in the R&D costs involved in creating a new product which average about $500 million for a non-biologic drug (That’s taking an NCE (new chemical entity) through to approved drug, including paying for Phase I through III trials.))

    Then there are the costs for the R&D NOT recouped from failed drugs. Torcetrapib springs readily to mind.

    That money doesn’t grow on trees.

  7. FDPharmD  •  Jun 20, 2007 @6:55 am

    True there are R&D costs, but they could easily recoup them as they spend billions every year on advertising, if they sunk that in R&D perhaps we might be closer to a cure for cancer or AIDS, or some other really crappy condition!

  8. Nic  •  Jun 21, 2007 @4:18 pm

    Most of the stuff we’re getting now had minimal R&D costs because they’re not novel therapeutic entities. It’s the same old thing in pretty new packaging, or it’s a single isomer instead of a racemic mixture, or an orally disintegrating tablet form when in the past you had to actually swallow a tablet. Massive R&D costs are a myth. Drug companies spend more on advertising and marketing.

  9. clarkpharm2  •  Jun 22, 2007 @11:45 am

    NIC
    see my #3 comment above, and you’ll find I
    generally agree with your #8 commentary; as
    a chemist, you know that sometimes those
    molecular “tweezers” can be expensive when
    making a “levo” from a racemic mix. As for
    blanket statements like “drug companies spend
    more on marketing and advertising”–well, some
    proof would be nice. Notice that I’m NOT
    defending/justifying the expenses on such items.
    The free-enterprise system(perverted by patents,
    FDA, and greedy people) may NOT be the most
    cost-effective way to generate a stream of truly new entities. But it beats the hell out
    of any alternative systems I’ve seen so far(eg
    government-operated–not just govt-subsidized
    R & D, such as pre-war Germany and pre-Gorby
    Russia). Nobody ever said that a free market
    generates NEW entities FASTER–but I contend it
    generates MORE new entities to compete with
    existing entities–thus, the dilemma. Massive
    R& D expenses are no myth–just look at Lilly,
    Sandoz, Glaxo(a merger of at least four major
    corps), and Astra–all of whom have plowed
    gazillions into reviving their new-product
    pipeline sometime in the last 20 years, with
    varying results. Viagra”saved” Pfizer and
    turned them into a buyer of other barren
    R&D-oriented corps(Upjohn, Pharmacia, etc).
    In most cases, as a dispenser, you need to
    let the market forces determine your inventory. Not much new here.

  10. doggydogg  •  Jun 27, 2007 @3:49 pm

    Very interesting analysis Jim. We don’t have auto shipments but I can certainly sympathize. Why should the onus be on you to ship something back to get a refund?

    I’m surprised to hear that 3x Symbicorts cost $437. Is that for the 200 mcg? Your cost or patient’s cost? 1 of the 200s goes for $78 USD here (my cost) or $100 USD (patient’s cost). Either way, quite a bit of a price discrepancy.

  11. Tye K Lawson  •  Feb 1, 2008 @12:49 am

    Remember the FDA’s “Fastrack Approval” system in the waning days of the Reagan Administration? HTLV III and ARDS? AZT was a landmark drug of retroviral etiology. Then debacles like the 1950′s leprosy drug, Phen-Fen, Vioxx, and the like slowed down the ‘Get it out there NOW’ ! order. Now, direct to Mkt AD’s are >triple the research dollars. The Rabbit or ther Hare? -Hmmm… more like the “Osterich.”

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