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Pricing Pfizer’s Xeljanz: An Opportunity for Change

A newly published report highlights the therapeutic paradigm shift and opportunity for change presented by Pfizer's newest treatment for rheumatoid arthritis.

The U.S. Food and Drug Administration recommended approval in 2012 of the Pfizer oral pill Xeljanz (Tofacitinib) which promises to represent a paradigm shift in the treatment of moderate -to- severe adult rheumatoid arthritis (RA), an inflammatory autoimmune disease of chronic nature. Rheumatoid arthritis affects approximately 1% of the world’s adults, with women accounting for 75% of those diagnosed.[i]

Utilizing its network of laboratory and clinical research professionals, eyeforpharma has published a full report on Pfizer’s new Rheumatoid arthritis drug Xeljanz which will be presented at American College of Rheumatology (ACR) / Association of Rheumatology Health Professionals (ARHP) 2012 Annual Meeting November 9-14 in Washington, D.C.

Therapeutic Paradigm Shift

Xeljanz is Pfizer's first-in-class small-molecule, a Janus kinase (JAK) inhibitor.  Used by other companies to treat various autoimmune conditions, JAK targets intracellular signaling pathways responsible for the activation of disease-causing immune cells.[ii] Xeljanz demonstrates comparable efficacy to the injectable anti-TNF-ainhibitors which represent current methodology in the second-line treatment of RA.

Since the U.S. patent expiration of Pfizer’s statin in 2011,[iii] TNF-ainhibitors have become the most successful commercial, branded drug class.  A current analysis projects the most recently approved of the three biologic agents, Abbott’s Humira, to replace Lipitor as the drug generating the most global revenue in 2012.[iv].

Humira presently leads the injected TNF-ablocker market and remarkably, at a time when “me-too” drugs tend to underperform,[v] Remicade and Enbrel are projected to place second and third, respectively in global revenue.  Importantly, although these biologic agents have obtained commercial approvals for multiple autoimmune disease indications, the bulk of revenue is generated from RA patients.

TNF-ablockers have been called a “pipeline in a product”,[vi] a claim predicated on the number of other autoimmune indications, beyond rheumatoid arthritis, that the TNF-ainhibitors have been approved to treat by regulators.  Humira, for example, has been approved to treat  rheumatoid arthritis, active polyarticular juvenile idiopathic arthritis, chronic plaque psoriasis, Crohn's disease, and ulcerative colitis.[vii]

Opportunity for Change

TNF-ablocking agents’modest market share in developed countries combined with their significantly discounted price in international market set up a very elastic global RA market for Xeljanz to enter. Such elasticity presents a rare opportunity for the drug industry in general and Pfizer specifically. Based on the greater convenience of an oral treatment, Pfizer could arguably price Xeljanz at a significant premium to TNF-ablocking agents. Alternatively, Pfizer could set the Xeljanz price at nearly half  that of TNF-ablocking agents,[viii] and  still generate the same amount of revenue in terms of peak sales, since increased volume will compensate for lower pricing.  Finally, a lower price would drive increased revenue earlier due to greater uptake of Xeljanz, and generate a cost-effectiveness argument based upon Xeljanz’ efficacy profile.

You can download your free copy of this report by visiting our microsite.


References:

[i]http://seekingalpha.com/article/581661-pfizer-is-8-really-enough?source=email_portfolio&ifp=0, 5/11/12, [ii]Vaddi K, Luchi M.  JAK inhibition for the treatment of rheumatoid arthritis: A new era in oral DMARD therapy.  Expert Opin Investig Drugs 2012; 21:961-73, [iii]cbsnews.com, 10/30/11; http://www.cbsnews.com/8301-505245_162-57333673/ahead-of-the-bell-pfizer-loses-lipitor-patent/, [iv]http://www.reuters.com/article/2012/04/11/pharmaceuticals-abbott-idUSL6E8FA3W020120411, [v]Pricing and Reimbursement Trends in the US: Impact of Comparative Effectiveness Research and Cost-Effectiveness Analysis”, for the British firm, FirstWord,© Copyright 2011 Doctor’s Guide Publishing Limited (Gorkin L, Waite J, ghostwriters), [vi]62.128.157.49/washington/content/pdf/4.16_ppt_William_Strohl.pdf, 1/30/12, [vii]http://www.pipelinereview.com/index.php/2012041247638/Antibodies/Abbotts-HUMIRA-adalimumab-Approved-in-Europe-for-Treatment-of-Ulcerative-Colitis-UC.html, [viii]www.amcp.org/WorkArea/DownloadAsset.aspx?id=12220, 7/09; http://www.nytimes.com/2011/11/23/business/amgens-new-enbrel-patent-may-undercut-health-care-plan.html 

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Value Beyond the Pill USA

Dec 3, 2014 - Dec 4, 2014, Philadelphia

2-day conference on how you can provide value beyond the pill in order to move from a product-focussed to a customer-focussed business