Monsanto Says Celebrex Drug Price Matches Competitors (Update2)
Bloomberg News
January 4, 1999, 4:23 p.m. ET
Monsanto Says Celebrex Drug Price Matches Competitors (Update2)
(Adds background, analyst comment, closing market activity.)
Washington, Jan. 4 (Bloomberg) -- Monsanto Co., a leading
agricultural products company expanding into pharmaceuticals,
said it will sell its newly approved Celebrex arthritis drug at
prices as low as or lower than comparable brand-name painkillers.
That's important because analysts had questioned the drug's
ability to compete with what they expected to be generally
cheaper alternatives, especially as the U.S. Food and Drug
Administration decided not to allow Searle to claim that Celebrex
is safer than other painkillers. Searle officials announced today
that the dose of Celebrex they expect to be most commonly used
will have an average wholesale price of $2.42 a day, though
prices could vary at individual pharmacies.
That's still higher than the price of at least one similar
competitor, SmithKline Beecham Plc's Relafen, said Robert
Seidman, vice president for pharmacy management at WellPoint
Health Networks Inc.'s Blue Cross of California unit. Both
SmithKline and Monsanto have positioned their drugs as
painkilling alternatives with fewer gastrointestinal side
effects.
''There is going to be a battle for the hearts and minds of
physicians as to whether Monsanto's product really is as
gastroprotective and whether physicians should continue with
Relafen, which they have a lot of experience with, or go to
Celebrex,'' Seidman said.
Price Issue Removed
Still, analysts said the lower-than-expected prices should
keep insurers from raising major objections to the drug and
should help it win prescriptions among doctors and reimbursement
from insurers.
''They've removed price as an issue,'' said Richard Stover,
an analyst with Arnhold & S. Bleichroeder.
Monsanto's Searle drug unit on Thursday won FDA approval to
sell the drug. While the agency won't let Searle say its drug is
safer than other alternatives, as the company originally hoped,
it will be able to describe studies showing lower incidence of
side effects such as gastric bleeding or an ulcer -- among
patients taking Celebrex.
Shares of St. Louis-based Monsanto rose 7/16 to 47 15/16.
The FDA's approval of the drug for treating osteoarthritis
and rheumatoid arthritis put Searle months ahead of its nearest
competitor, Merck & Co., in introducing the first of the new Cox-
2 inhibitors. Analysts have said the Cox-2 drugs can achieve
annual sales of as much as $5 billion if their makers can
convince doctors they have a safety advantage over existing
painkillers.
And the competitive pricing for Celebrex could help
Monsanto position itself to stay ahead of Merck even after
Merck's Cox-2 drug, Vioxx, is introduced, analysts said.
Race for Market Share
''By lowering the price you are going to see Celebrex
gaining market share more quickly,'' said William Fiala, an
analyst with Edward Jones. ''There is a limited time when they
are going to be the only product on the market. There is a race
and time is of the essence.''
Analysts said the company is betting that by selling more
drug, it will more than compensate for its making less profit per
sale. Searle officials said they plan to begin shipping Celebrex
within 10 days and will offer a 25-day free supply in an effort
to get doctors and patients to try the drug.
''I think when it's said and done, it's going to be the
right decision,'' Fiala said.
Shares of Searle's marketing partner Pfizer Inc., the New
York-based maker of the impotence pill Viagra, fell 1 1/4 to 123
3/4, while shares of Merck, the world's biggest drugmaker, rose 2
1/4 to 149 3/4.
Cox-2 Inhibitor
The Cox-2 inhibitor drugs work by interfering with the
production of an enzyme, cyclooxygenase-2, linked to pain and
swelling. Unlike existing NSAID painkillers, a Cox-2 inhibitor
doesn't suppress a related enzyme, Cox-1, that helps protect the
stomach from its own acid.
As a result, researchers say, the Cox-2 drugs should offer
the same benefits as NSAIDS with fewer side effects such as
bleeding and ulcers for people who take pain medication for
chronic conditions such as arthritis.
While SmithKline's Relafen targets both Cox-1 and Cox-2,
it's believed to have more of an effect on Cox-2. Therefore,
researchers have said it has some of the same benefits seen with
the specific Cox-2 inhibitors such as Celebrex.
WellPoint will limit its coverage of Celebrex and others in
the class known as Cox-2 inhibitors largely to higher-risk
patients, such as people over the age of 65, rheumatoid arthritis
patients and those who have already had a bad reaction to other
painkillers, Seidman said. He said he'd fight to keep Celebrex
from lowering the use of generic alternatives, which currently
account for about 75 percent of the so-called non-steroidal anti-
inflammatory drugs covered by the company.
Generic forms of drugs in the widely used NSAID painkiller
class can cost as little as $4 to $7 a month, Seidman said.
SmithKline's Relafen is closer to $1.94 a day, he said.
--Kristin Jensen in the Washington newsroom (202) 624-1843 with |
