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Sanofi/Regeneron Cut Price of PCSK9 Inhibitor Praluent by 60%

Zacks Equity Research

Sanofi SNY and partner Regeneron Pharmaceuticals, Inc. REGN announced a 60% cut in the U.S. list price of their PCSK9 inhibitor, Praluent, following a similar action last year by rival Amgen, Inc. AMGN to improve access and affordability of the product

Sanofi/ Regeneron said that beginning in early March both the 75 mg and 150 mg doses of Praluent will be made available at a U.S. list price of $5,850 annually. The new price, which is 60% less than the original price, should lower the “out-of-pocket” costs of Praluent. The companies estimate that out-of-pocket costs for Medicare patients could decline to approximately $25 to $150 per month, a potential savings of up to $345, depending on patients’ insurance plan.

Sanofi has been actively negotiating with U.S. payers to simplify the utilization management criteria and improve access to Praluent. Since March last year, Sanofi and Regeneron have committed to lower Praluent’s U.S. net price for those payers who agree to reduce access barriers for high-risk heart patients. Though these efforts have paid off, the improved access came at the cost of significantly higher rebates, which hurt profits from the drug’s sales. Praluent sales were up 56% in 2018 at constant exchange rate as Praluent is gaining category share, mainly owing to its exclusive coverage by Express Scripts (now a cart of Cigna Corporation CI).

Along with the latest release, Regeneron’s chief executive officer said that though patient access to Praluent has improved with their efforts, some patients are still unable to afford it due to high co-pay costs or co-insurance at many Medicare Part D plans. The price cuts should encourage payers to improve access to Praluent, which will encourage use of the drug. It goes without saying that the price cuts will significantly dent Sanofi’s profits from the drug.

In October last year, Amgen announced its decision to cut the U.S. list price of its PCSK9 inhibitor Repatha by 60% to improve access and affordability. Earlier this year Amgen informed that all device options of Repatha including pre-filled syringe and the Pushtronex system are now available in the United States at a discount of 60%. Repatha SureClick autoinjector, the most popular device option of Repatha, has been available at a discounted price since Oct 24 last year. Sales of Repatha rose 62% in 2018 as higher demand offset lower pricing.

Nonetheless, sales of both these PCSK9 inhibitors have been below expectations since launch in 2015 due to payer restrictions. Amgen has in the past said that despite efforts to improve access to Repatha, patients face significant hurdles due to high co-pay expenses. Though lower price may impact Repatha sales in the near term, Amgen management is optimistic about better volume growth in the long term.

Sanofi’s shares have performed in-line with the industry in the past year. Both have risen 6.9% in the said time frame.

 

 

In the past year, Regeneron’s stock has risen 19.2%, largely outperforming the 17.3% decrease of its industry.

 

 

Sanofi currently carries a Zacks Rank #3 (Hold) while Regeneron has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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