Market price

With 7 PD- (L) 1 in the market, price competition was not a factor. Will Regeneron be the first to ask for less? – Terminal news

In what appears to be a counterintuitive strategy, seven drugs have stacked up in the anti-PD- (L) 1 market so far, all at roughly the same list price. In the absence of proper price competition, how do companies like Sanofi’s Regeneron and Libtayo differentiate themselves? Maybe try to discount, thinks a leading analyst.

Ronny gal

In an open letter to Regeneron CEO Len Schleifer, Bernstein analyst Ronny Gal asked the New York drugmaker to be the first to downsize its partner Libtayo as more competitors crowd into the land without significant price competition.

On Thursday, GlaxoSmithKline’s Jemperli became the seventh PD-1 in the U.S. market, joining Merck’s best-selling Keytruda, Libtayo and Bristol drugs Myers Squibb, AstraZeneca, Roche and Pfizer. The drug will be offered at a list price of $ 10,000 per 500 mg vial with an estimated monthly cost of around $ 15,000, roughly on par with the rest of the industry.

In her letter, Gal argued that price competition has not fostered innovation in oncology and that oncologists have generally looked at more expensive drugs given their own financial incentives. But with changing attitudes about pricing, Regeneron may have the opportunity to downsize its competitors and grab a large share of the market before more competitors enter the field and inevitably take the lead. discounts. Addressing Schleifer, Gal writes:

While some of your peers may not be very happy with your strategy at first, you will be doing the industry a service. The strongest argument for government intervention in drug pricing is that market forces are failing. There are now six approved PD-1s [sev­en with Jem­per­li], none have done face-to-face testing, and they all raise the prices every year. The best thing you can do for the industry is to demonstrate that market forces are working. This is an opportunity for Regeneron to become a true leader in the pharmaceutical field, the company having historically led biotechnology.

According to Gal, if Regeneron follows this advice, it could secure an additional 10% market share in some of the most important indications, including non-small cell lung cancer, renal carcinoma and melanoma. Add that in and it could represent $ 2 billion in sales per year for Libtayo. Meanwhile, Regeneron could still charge the highest price for drugs used in combination with anti PD-1.

The choice of discount now will be important if the PD-1 market does add more competition in the years to come, with applicants from Eli Lilly, Novartis and Coherus all seeking approvals. Jemperli’s accelerated nod shows that other drugmakers are also planning to charge a premium for their drugs, but it is highly likely, Gal writes, that one of these latest entries in the race will include a discount will go a long way in differentiating themselves. themselves.

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