Viagra sales seen zooming despite insurer curbs
By Ransdell Pierson
NEW YORK, April 29 (Reuters) - One of the fastest-selling drugs in history will not be slowed down by tough new insurance restrictions because men will inevitably pay for the drug themselves to boost their quality of life, analysts said on Wednesday.
Scorching sales of Viagra, the first impotence pill that is made by Pfizer Inc. (PFE - news), have made the drug a media sensation and helped sustain a 50 percent jump in the New York-based company's share price for the year.
But insurers are beginning to clamp down on Viagra coverage in the face of burgeoning demand for the drug which retails for $10 a pill, apparently out of concern that Viagra might be prescribed for uses other than strict medical needs.
Earlier Wednesday, CIGNA HealthCare said in order to qualify for Viagra coverage patients must be male and must have a preexisting documented condition of organic impotence, which is currently being treated by other medical means.
In addition, the health maintenance organization which insures 15 million people said impotence must not be the result of current drug therapy. If patients met this criteria, the unit of CIGNA Corp. (CI - news) said it would pay for a maximum of six tablets per month.
WellPoint Health Networks Inc. (WLP - news) and Kaiser Permanente, two of the nation's largest HMOs, are also adopting strict coverage policies, the New York Times reported on Wednesday.
''I don't expect a slowdown. I don't think sales will be affected because the drug improves quality of life in an area that is important to most men,'' said independent New Jersey drug analyst Hemant Shah.
''Price does not appear to be an issue. People with this problem want to take care of it,'' said Shah.
He estimated half of all buyers are paying themselves for the blue pills, without expectation of being reimbursed by insurers.
Shah said his own survey of 40 drugstores in Brooklyn, N.Y., indicates the average prescription contains about 15 pills and therefore retails for about $150. Pfizer's wholesale price is $7 a pill, or presumably about $105 per prescription.
Over 113,000 prescriptions were written in the week of April 17, Viagra's second week on the market, according to auditing firm IMS America. That is dozens of times higher than typical for successful newly launched drugs.
Shah said he assumed insurers will continue to tighten restrictions on the drug, in which case the ratio of patients paying their own money for Viagra will probably rise to 70 percent.
Shah said his poll of Brooklyn druggists indicates many women are buying Viagra, apparently in an effort to improve their own sexual arousal.
Although Pfizer is conducting clinical trials of Viagra in women, the drug was approved by the U.S. Food and Drug Administration only for men.
''We don't care about insurance restrictions. We don't think people care,'' said Bear Stearns & Co. drug analyst Scott Shevick, who predicted Viagra revenues would continue their ''parabolic rise'' regardless of reimbursement curbs.
When the dust eventually settles, Shevick said insurers probably will wind up paying for about half of prescriptionswritten. But to be on the cautious side, he said his Viagra sales projections of $600 million in 1998 and $1.2 billion in 1999 assume no insurance reimbursement whatsoever.
Viagra works by blocking an enzyme that interferes with blood flow into the penis. Although Pfizer said there is no proof yet the drug has the same beneficial affect on female sexual organs, the company is testing the theory.
Once a drug is approved a doctor is generally able to prescribe it to anyone, regardless of whether it was approved for men or women.
Such ''off-label'' use is apparently commonplace for Viagra, Shah said.
Corey Davis, a Hambrecht & Quist pharmaceuticals analyst, said he had not altered his $345 million Viagra sales projection for 1998 and his $700 million estimate for 1999 despite the balking insurers.
''The growth we're predicting won't be affected. If the curbs were really going to slow growth you'd probably see Pfizer's stock taking a hit, and it's not,'' Davis said.
Pfizer shares closed slightly lower on the New York Stock Exchange, down 3/8 at 112-5/8.
Men who are covered by Wellpoint Health Networks will not be reimbursed for the prescription unless they have a doctor's written statement that they suffer from erectile dysfunction, according to the New York Times report.
WellPoint was not immediately available for comment. Later this week, Kaiser Permanente is expected to introduce a policy similar to CIGNA's, Times said.
Kaiser Permanente was also not immediately available for comment.
In other news, the New York insurance department said Wednesday it is asking the state's health insurers for information about whether they are going to provide coverage for Viagra and the justification for their decision.
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