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Model N, Inc. Message Board

bbarra1 356 posts  |  Last Activity: Dec 24, 2014 9:29 PM Member since: Jun 17, 1999
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  • Merry Christmas to Bagholder Shorts!! And a Crushing New Year!!

  • bbarra1 bbarra1 Dec 24, 2014 9:20 AM Flag

    The only time a new drug starts at Tier 2 is if the cost is substantially less and it is at a minimum an equivalent. The best drugs start at Tier 3. This is to extract discounts and rebates from the manufacturer. Once the volume of the drug is high, the insurance company will offer to move the drug to Tier 2 in exchange for higher rebates. Look at what happened to Gilead's Sovaldi (Hep C). It is still far superior with 95% cure rate but it was removed by Express Script from the formulary and replaced with a less effective drug with a cure rate less than 90%. The reason is "cost". It's all about cost.

  • Reply to

    Merry Christmas

    by congomunro Dec 23, 2014 4:29 PM
    bbarra1 bbarra1 Dec 23, 2014 5:18 PM Flag

    Merry Christmas and Happy New Year to All Longs. Sorry, only coal for shorts.

  • bbarra1 bbarra1 Dec 23, 2014 9:04 AM Flag

    m36, "Who taught you how to write? Oh you must be from the Phillipines." -Funny when you read a writer critic that can'e spell. There is no country spelled that way.

  • Reply to

    One More Correct Guess and We can Retire

    by bbarra1 Dec 5, 2014 9:55 AM
    bbarra1 bbarra1 Dec 12, 2014 8:48 AM Flag

    It may go faster than you think. I will depend on how many diabetic patients will give it a try. Once you see people in public places using Afrezza it will become a 'must switch'. By summer, diabetic camps are very popular and all these teens will be wondering why they are still injecting themselves when other are just inhaling it.

  • Reply to

    Pharmacy's profits?

    by daduke38 Dec 7, 2014 7:55 AM
    bbarra1 bbarra1 Dec 7, 2014 8:07 PM Flag

    laxlg, pharmacies cannot mark up drugs because the insurance companies will only pay what they publish they will pay. So it doesn't matter what the pharmacies mark up, they are not getting paid more.

  • Reply to

    Pharmacy's profits?

    by daduke38 Dec 7, 2014 7:55 AM
    bbarra1 bbarra1 Dec 7, 2014 9:15 AM Flag

    cp, another way to look at my post is: If MNKD committed to minimum of $145M annual supply of insulin from AMphastar for 2015, how much sales were they projecting. If you use your 70% margin estimate.

  • Reply to

    Pharmacy's profits?

    by daduke38 Dec 7, 2014 7:55 AM
    bbarra1 bbarra1 Dec 7, 2014 9:13 AM Flag

    cp, can i ask a favor. MNKD signed a supply agreement to buy insulin from Amphastar for a minimum of EU120M or $145MM annually starting 2015. How much sale can that support? If that is only for $2B in sales then each $1B will have a $75M cost of insulin alone or 7.5% cost per $1B. That leaves both manufacturing and Sanofi marketing costs to be 22.5% (if we want a 70% margin). Will appreciate your analysis around this.

  • Reply to

    Pharmacy's profits?

    by daduke38 Dec 7, 2014 7:55 AM
    bbarra1 bbarra1 Dec 7, 2014 9:01 AM Flag

    Nice CP, i like your logic. I think that's why they had to look into Sanofi providing the insulin at cost to MNKD to get to that 70% margin. Here's another reference point. If the Pfizer insulin that MNKD cost $30M and can supply $1B in sales then the raw material cost is around 3% (30/1,000). Add the manufacturing costs of say 10% ($100M per $1B). That gives Sanofi's' distribution and marketing cost around 17% ($170M per $1B) ( 3%+10%+17% = 30% cost to give 70% margin). Very high level guesstimates.

  • Reply to

    Pharmacy's profits?

    by daduke38 Dec 7, 2014 7:55 AM
    bbarra1 bbarra1 Dec 7, 2014 8:37 AM Flag

    daduke, the reason why nobody can provide the margins is because the reimbursement rates vary by insurance. The most common is AWP less 10%; where AWP is equal to WAC X 1.2. So for example, if Afrezza's WAC is $200 then the insurance company will pay the pharmacists $216 ($200 X 1.2 = $240 less 10% = $216). But how much did the pharmacist buy the product for? Each one will have its own discount rate depending on their bargaining power. For example, Walmart might get 10% discount off WAC while a small pharmacy may get 5% ($200 less 10%= $180). So the net cost to Sanofi, in this example is $180. Then you deduct all the downstream cost of distribution, the wholesaler's, the GPO fees, the PBM rebates, the Medicaid rebates etc. Not very easy at all. We'll just have to wait and see.

  • Reply to

    When a revenue occurs

    by stock_fanthom Dec 6, 2014 9:52 AM
    bbarra1 bbarra1 Dec 6, 2014 4:09 PM Flag

    I can tell you that Afrezza is not on the Medicaid product list yet effective January 1 2015. This may be due to the cut-off for submitting the request to Medicaid (sometime September 2014). SNY will have to request for a temporary reimbursement code. It is usually published in the CMS website (Center for Medicare and Medicaid Services) Go to CMSdotGov and do a serach for HCPCS Codes.

  • Reply to

    When a revenue occurs

    by stock_fanthom Dec 6, 2014 9:52 AM
    bbarra1 bbarra1 Dec 6, 2014 4:04 PM Flag

    stock_f, some drug prices are published. The wholesale acquisition cost (WAC) is published and usually available online. The price to pharmacies are not easy to determine because of many variety of discounts such as "rebates" and fees. There are rebates to insurance payers, rebates to wholesalers, rebates to pharmacies, admin fees to Group Purchasing Organizations and other buying groups, etc, etc. So, even if you had access to SNY books you won't really know how much the price is to the pharmacy because SNY sells to the wholesalers and the wholesalers sell to the pharmacy. The shipping invoice is just the starting point of the price and you would have to deduct all the rebates and fees paid to the downstream distribution network. The best way to determine this is through gross margin by product. In aggregate, if the margin pre-set by both MNKD and SNY is achieved then it doesn't matter what price the product is being sold at. On the reverse side, you can look at reimbursement rates (Medicaid publishes the formula by State) which is usually Average Wholesale Price less 5%. AWP is WAC X 1.2. Bottom line is, 65%-35% split after all costs is what it boils down too.

  • With nothing but faith in Al and Afrezza we assumed:

    1. The trial data was kosher and despite naysayers including the former MNKD Chief Compliance Officer filing a lawsuit; (PPS at $1.90 I don't blame you if you sat on the sidelines)

    2. Even if the trial data was good, will the scientific community support Afrezza and its proposed medical theories? Yes said 12 experts handpicked by the FDA by 12-1 vote for Type 1 and 13-0 for Type 2

    3. Even if the AdCom voted overwhelmingly for the FDA, the FDA has in some occasions rejected drugs - Yes said the FDA, it is safe and effective;

    4. But will anyone partner with MNKD? OPC said they had been faking a partner since 2010. He must be right. Well, we know how that panned out.

    5. Now we ask, will patients ask for Afrezza. Will doctors prescribe Afrezza? Is this question more risky than the 4 above? Do your own DD. A lot of us got through #1 to 4 above. Why on earth will you sell now?

  • Reply to

    Formularies - The REAL Story

    by badbert3 Nov 30, 2014 6:54 AM
    bbarra1 bbarra1 Dec 5, 2014 9:10 AM Flag

    daduke, I agree with everythying you said. But consider this, we held before an AdCom vote purely on faith. Hell, we don't know if the information we had at the time was any good. To be discouraged at this time when most of our theories have proven itself and supported by AdCom and FDA would be ridiculous. The silence from MNKD is consistent with what we would expect from a prudent management given how we've seen the great length that these shorts with go through to sabotage the success of Afrezza. I say let them keep dumping cheap shares as long as short volume keeps rising. My biggest worry is that pps goes down and short volume goes down - now that is a real red flag.

  • Reply to

    Let's face it

    by nodramanopressure22 Dec 5, 2014 7:28 AM
    bbarra1 bbarra1 Dec 5, 2014 8:59 AM Flag

    lol. She also sold because she did not believe the Adcom will support Afrezza. she sold before FDA approval believing the FDA will reject Afrezza. So there goes your theory.

  • Reply to

    Class action lawsuit against SNY

    by nialla44 Dec 4, 2014 6:59 PM
    bbarra1 bbarra1 Dec 4, 2014 7:51 PM Flag

    nialla, this is not a class action lawsuit. its an individual's lawsuit. not even a government investigation. its just an extortion suit or a disgruntled fired employee trying to get a severance. if it had merit, the government would have filed the lawsuit.

  • bbarra1 bbarra1 Dec 4, 2014 8:19 AM Flag

    ok. I got my math wrong. you are off 300%, not 100%. Al owns at least 160M shares, not 40M.

  • bbarra1 bbarra1 Dec 4, 2014 8:17 AM Flag

    elamestro, 'Al and his 40 Million shares is what matters so keep your eye on the ball here'
    I thought you've been here a long time. He owns 40% to 45% of the 400M shares outstanding. You are only off by 100%.

  • bbarra1 bbarra1 Dec 3, 2014 7:52 PM Flag

    kevin, here's to spark your imagination. Maybe the writing is on the wall that they won't need an HR function. Oh, so when does that happen?

  • Reply to

    Sanofi kickback scheme

    by s0cial1nvest0r Dec 3, 2014 4:44 PM
    bbarra1 bbarra1 Dec 3, 2014 5:19 PM Flag

    Very suspicious lawsuit. The plaintiff, a former paralegal at Sanofi claims that Sanofi was paying Accenture and Deloitte to bribe doctors. That by itself is already unbelievably ridiculous. If they wanted to bribe doctors why did they hire accounts and auditors to do it? Not surprising that the Dept of Justice decided not to file the case and the plaintiff had to do it alone.

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