Genzyme's $176K Kynamro price undercuts its $250K-plus rival

Will pharma's rare-disease strategy falter as more pile into smaller spaces?
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Kynamro treats a rare and dangerous form of high cholesterol.--Courtesy of NIH

Sanofi's ($SNY) Genzyme unit has set the price on its new rare-disease drug Kynamro: $176,000. That's steep, but it's part and parcel the super-niche-market strategy that's Big Pharma's new bread and butter. Targeted cancer drugs, orphan drugs, ultra-orphan drugs--they come with prices big, bigger and biggest.

But Kynamro, for homozygous familial hypercholeseterolemia, illustrates a couple of pitfalls on the rare-disease path. It's expensive, but not as expensive as its only competitor, approved just last month. That Aegerion Pharmaceuticals ($AEGR) treatment, Juxtapid, runs $235,000 to $295,000 a year, depending on the patient, The Wall Street Journal reports. Whether Kynamro can compete with Juxtapid on price remains to be seen--there are other differences between the two drugs, obviously, including side-effects profiles. When patients suffer from life-threatening, rare diseases, insurers have a hard time saying no.

But the Sanofi drug's discount is one more variable for the treatment-choice equation. Payers are never eager to spend extra if they don't have to. And as Sanofi's recent experience with oncologist pushback on its Zaltrap price shows, doctors are considering price tags these days, too. With more and more drugmakers piling into niche markets, companies will be under more and more pressure to prove their drugs are superior to their rivals and worth whatever price they choose to set.

They'll also be under pressure to perform on the marketing-and-customer-service side. As The Street's interview with Aegerion CEO Marc Beer shows, rare-disease drugs are hands-on products. Unlike mass-market drugs, they don't launch and then take on a life of their own, with some DTC support and pharma rep detailing to keep things fresh. With rare-disease drugs, every patient is shepherded through the reimbursement process. Many patients get assistance, whether from the company or from patient groups. And patient relationships are managed as therapy continues.

Genzyme knows this process well. It's been working with patients who use its rare-disease drugs Fabrazyme, Cerezyme and Myozyme for years. And it hasn't been easy; when the company's manufacturing foundered and supplies constricted, Genzyme had to contend with rationing, dose restrictions and plenty of unhappy patients. So, Aegerion--actually, any company learning the rare-disease marketing ropes--needs to build an effective marketing and customer support machine. Fewer people might be necessary. But those few will have to know their stuff.

- read the WSJ piece (sub. req.)
- get more from The New York Times (sub. req.)
- see The Street's interview

Related Articles:
FDA hands Sanofi, Isis an approval for HoFH drug Kynamro
FDA approves Aegerion's lomitapide for rare cases of HoFH
EMA committee shoots down Sanofi's cholesterol drug mipomersen
Genzyme's mipomersen wins key FDA panel vote for rare cases of HoFH
FDA frets over safety of Genzyme's rival drug for rare cholesterol disease

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