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Aegerion Pharmaceuticals, Inc. (AEGR) Message Board

  • yassen_gregorivich yassen_gregorivich Jan 3, 2013 10:56 AM Flag

    AEGR market and patient population and cost of $300K/year/patient

    In doing due diligence, it appears the target market for this treatment is much larger than the 6,000 patients that the company is officially targeting. I wondered why this was and today's Forbes article on NPSP gave a key factoid in describing how they can justify a cost of $295K for their Gattex.

    Item #4 explains "4. The orphan drug premium" that Gattex is only going to treat 3,000 patients, therefore, the treatment cost has to offset the development cost. With only 3,000 patients, they divide costs by a small number of patients, yielding a higher price per patient. Therefore, it is in the company's best interest to keep a narrow patient target list to keep the treatment price high.

    This way, if more patients than the original conservative estimate, buy the drug, it helps the bottom line tremendously. It also gives the company additional latitude in giving the drug for free to patients with no insurance as well as subsidies to help patients with co-pay amounts which could be as high as 30%.

    Further, they checked with insurers to see what price they would cover, and found insurers would cover at even higher treatment prices. A very wise move.

    This is a very sound business strategy that appears to be the same that AEGR is using.

    So lets keep the target patient population for AEGR at 6,000 or even less, until it hits the market and starts generating sales and revenues. Then if the actual patient population is much larger, so much the better.

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