Amid new speculation that Pfizer might snag Shire in a buyout deal, the specialty pharma is following through on its strategy to switch patients to its newest ADHD med Vyvanse as blockbuster Adderall XR nears the end of its patent. Shire is hiking the price of Adderall by 20 percent, a boost that confounded analysts expecting a smaller increase.
The idea, of course, is that by making Adderall more expensive, Shire will shine the spotlight on Vyvanse, whose price is rising by a mere 7 percent. Cost-conscious patients will then switch to the cheaper brand, or so the theory goes. Then, firmly entrenched as Vyvanse users, the patients won't move to generic Adderall when it hits the market.
Analysts apparently expect the switching to stick; Citigroup upgraded Shire stock on the prospect. But with insurers increasingly vigilant about drug prices, generic Adderall might woo away more Vyvanse users than Shire wants to lose. We'll have to wait and see how that plays out.
In the meantime, though, investors are bidding up Shire stock on fresh rumors that Pfizer is kicking tires there. The U.K. company surfaces as a rumored Pfizer target from time to time, however, so it's tough to know whether Pfizer is actually looking, or whether the habitual talk simply got stirred up when Pfizer chief Jeff Kindler made his "open to big deals" statement earlier this week.