|Cerdelga--Courtesy of Genzyme|
Here's why Big Pharma wants to be in rare diseases--and why Sanofi ($SNY) made its $20.1 billion play for Genzyme. The company has slapped a price tag on its new oral treatment for Gaucher disease, Cerdelga: $310,250 per year.
No small change, that. But it's about par with the company's Cerezyme infusion for the same disease. And in the realm of rare disease drugs, $300,000-plus isn't unusual.
In fact, Genzyme priced Cerdelga on an even basis with Cerezyme to take cost out of the equation. As CEO David Meeker has said, "Our goal is to price this in a way that does not bias the medical decision-making process."
Plus, as Genzyme notes, payers are accustomed to shelling out those amounts to treat Gaucher patients. "The health care system already has been taking care of people with Gaucher disease," Genzyme spokeswoman Lori Gorski told the Boston Globe. "This is not a new burden on the system."
Sounds like a dream for drugmakers increasingly forced to offer price breaks and justify costs on their new products. Think of the outcry--complete with Congressional hearings--about the $84,000 price on Gilead Sciences' ($GILD) new hepatitis C treatment Sovaldi. Or the new exclusionary formularies from CVS Caremark and Express Scripts, which shut out some big products in favor of discounted competitors.
For Genzyme, however, the rush into rare disease territory means more competition for its products. Once the only treatment in the Gaucher world, Cerezyme now faces competitors from Pfizer ($PFE) and Shire ($SHPG)--and Cerdelga, of course. Meanwhile, four companies have early-stage biosimilar programs underway.
The very nature of rare diseases means there's a limited patient pool to share. With its rare-disease know-how--and relationships with patients--Genzyme might have an edge. But some patients haven't forgotten the shortages caused by contamination at a key Genzyme plant years ago.
Pfizer and Shire aren't sitting on their hands, waiting for patients to switch to their meds. They're looking for ways to differentiate themselves. When Pfizer launched Elelyso, it promised a 25% discount to Cerezyme (though reports have recently put its price above $300,000 as well). Pfizer even took the unusual step of having its Elelyso drug kosher-certified (needlessly, we might add).
Which brings us back to Cerdelga. It's a pill. That's an unquestionable difference from the rest of the pack. Genzyme might find Cerdelga stealing patients from Cerezyme--but the company could well grab other infusion-drug patients, too. Even at $310,250 per year.
- read the Boston Globe story
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