By David Moskowitz
Optimer Pharmaceuticals (NASDAQ:OPTR) is hosting its Analyst Day in NYC this morning and is detailing its new strategy, which includes lowering the price for lead growth driver, Dificid, in order to increase uptake of the product. Dificid was launched by the company in July 2011, and is a next generation antibiotic indicated for the treatment of C. difficile infection (CDI), which can cause severe and life threatening diarrhea. The issue is that while Dificid has demonstrated improved efficacy vs. current treatments, competing therapies are still very effective and are generic, so price is much lower than for Dificid. As a result, adoption of Dificid in the hospital setting, where CDI infection is primarily diagnosed, has been disappointing (see PropThink's prior story (http://www.propthink.com/optr-under-pressure-analyst-downgrade-fans-the-fire/2072)).
According to the company, lowering the price for Dificid in hospitals by 25% will only affect about one-third of sales, given that most patients treated for CDI are discharged from the hospital and finish the course of therapy on an outpatient basis. Optimer predicts that Dificid prescribing will rise substantially in hospitals given the discount, as more hospitals may move to use the drug first-line because of the reduced direct cost to prescribe Dificid, as well as the ability to lower patient re-treatment rates, saving hospitals more money in the long run. Because nearly 70% of sales come from the retail pharmacy channel, the company believes that higher volumes driven by the new strategy will substantially offset the lower hospital-based price. However, the company will also need to address the high co-pays that a majority of patients need to pay when they pick up a prescription at the pharmacy. The company notes that a substantial number of private insurance company and Medicare/Medicaid patients still don't have preferred access to Dificid. So in addition to the hospital discount, Optimer is implementing a Patient Assistance Program, which has so far demonstrated that the rate of prescriptions actually getting filled has risen from 29% to 75%, according to company data. Management, however, did not mention the cost of the Patient Assistance Program, and it is still unclear whether the increase in the rate of filling will be maintained on a broader scale and on a longer term basis. The actual co-pay that many patients will pay is not consistent, and may not be enough for certain groups to get them to follow through and fill their Dificid prescription at the pharmacy.
Read the rest of this article at PropThink.com by clicking here. (http://www.propthink.com/optr-fighting-weak-dificid-trends-with-price-reduction-estimates-going-down/2451)
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