Sales of Addyi have been disappointing. One of the main problems is calling it “female Viagra” when it works in an entirely different way than Viagra does.
While the drug was never expected to be a blockbuster on the order of Viagra, sales of up to $150 million through mid-2017 were projected, which is nothing to sneeze at. More recently, however, all signs point to the drug failing to meet sales predictions. Three main reasons for disappointing sales include the drug’s high price, pharmaceutical company Valeant’s acquisition of Addyi maker Sprout Pharmaceuticals, and insurance formularies that either don’t cover the drug or make patients and doctors jump through hoops to get it.
Valeant has promised to spend $200 million on marketing and R&D for Addyi from January 2016 through mid-2017, but now original investors in Sprout pharmaceuticals are questioning just about everything Valeant has done with the drug since it acquired Sprout in 2015. Additionally, problems with Valeant that have little to do with Addyi or its marketing have affected its sales, and investors aren’t happy about it.
Specialty Pharmacy for Addyi Now Out of Picture
A mail-order specialty pharmacy called Philidor was originally slated to help boost profits for Valeant by filling Valeant’s name brand drug prescriptions. Were an independent pharmacy to fill a prescription for a Valeant drug (such as a popular medicine the company made to treat toenail fungus), they might substitute a generic or a less expensive alternative. Philidor, on the other hand, appears to have been used by Valeant as a way to shore up its aggressive copay offset programs, endearing them to essentially no one but Valeant and Philidor themselves.
Valeant was one of the hottest stocks on Wall Street for years, mostly based on CEO Michael Pearson’s new business model that created a drug giant to distribute drugs (Philidor) and that outsourced research. For a while Valeant stock rose steadily. Eventually, however, allegations surfaced that Valeant wasn’t so much successful for its business model, but for a more straightforward reason: price gouging.
Last October, investigators revealed questionable connections between Valeant and Philidor, which appeared to be controlled by Valeant, though Valeant shareholders had never been told about it. A network of “phantom captive pharmacies” prompted financial analysts to compare Valeant to early 2000s train wreck Enron. Under pressure, Valeant cut ties with Philidor and shut it down altogether by the end of last October. None of this sat well with investors or consumers. But Philidor being out of the picture has done nothing to make Addyi easier to get or more affordable.
Investors Upset About Valeant’s Acquisition of Sprout Pharmaceuticals
Last year, Valeant purchased Sprout Pharmaceuticals, the maker of Addyi, for $1 billion. The people who originally invested in Sprout, however, say that Valeant has completely fallen down on the job of commercializing Addyi. For one thing, they set the price twice as high as what Sprout said the drug would sell for. They also neglected to market the drug, and while this may not sound like that big a deal, it could violate the Valeant-Sprout merger agreement.
Sprout shareholders have requested materials from Valeant that demonstrate the company can fulfill its obligations to commercialize Addyi. They not only want evidence that the company is indeed on track to spend $200 million for marketing the drug through mid-2017, but also assurance that Valeant plans to maintain a sales force of 150 to distribute Addyi.
Allegations of Predatory Pricing for Addyi
Before Addyi went on sale, Sprout established an already lofty price point of $350 to $400 per month (before insurance coverage) based on their market research. Valeant, however, doubled that. At $800 per month, insurers are refusing to cover any of the costs of the drug, so if a woman doesn’t have an extra $800 per month lying around, she likely can’t afford to take Addyi.
Though drugs for erectile dysfunction (ED) in men are not comparable in mode of action to Addyi, and although ED drugs are themselves pricey, ED drugs are taken as needed, so they’re nowhere near as expensive as Addyi, which must be taken every day, long term to produce results. And if pharmacies raise prices even more to boost their profits, the drug becomes even more out of reach.
One 55-year-old public health educator in San Diego, who experienced positive results after taking Addyi, was only able to afford the drug due to copay coupons, which were good only for a limited time. Her insurer didn’t cover the drug, and she reported that her drugstore tried to charge as much as $1,200 for a one-month supply – three times the price point Sprout Pharmaceuticals originally suggested.
Other Barriers to Prescribing Addyi
Addyi’s huge price tag has prompted many insurers to exclude the drug from their formularies and to impose additional barriers to the prescription of the drug in the first place. For example, some insurers require patients to see a psychiatrist before they can be prescribed Addyi. When the drug does find a home in an insurer’s formulary, it’s usually in the highest tier of copayments, which also drives down demand.
Insurers are happy to seize upon the fact that Addyi isn’t really a gynecological drug, and it isn’t really a psychiatric drug, but rather something in between, so it’s at once harder for doctors to prescribe and harder for patients to get their hands on. Women with low sexual libido typically visit their gynecologist first, particularly if their gynecologist functions as a primary care physician as well. Yet some insurers say that an OB/GYN is not qualified to diagnose hypoactive sexual desire disorder (HSDD), the condition Addyi is designed to treat.
Valeant’s Woes Extend Well Beyond Addyi
If Addyi and the doomed relationship with Philador were the only thorns in Valeant’s side, things might be a little more hopeful for women who want to take Addyi. But they’re not. In fact, after Valeant acquired Sprout, accounting problems coupled with more than $30 billion in debt put an end to further mergers and acquisitions for Valeant. It also made the acquisition of Sprout seem like a bad idea, casting a pall over Sprout’s product, Addyi.
Valeant has PR problems, sure, but worse than that it looks like it has been hungry for ill-fated acquisitions. Furthermore, Valeant CEO Mike Pearson is parting ways with the company, under less-than-rosy circumstances. He was also subpoenaed to appear before Congressional hearings to do with pharmaceutical price gouging.
Valeant may have been able to make cost cutting and aggressive price hikes work on past acquisitions, but renewed attention to pharmaceutical price gouging makes it appear those days are over for good. Remember reviled “pharma bro” Martin Shkreli, whose former company Turing Pharmaceuticals increased the price of Daraprim by 5,000%? Even he won’t touch Valeant at the moment.
Valeant Still Committed to Addyi
Valeant nonetheless insists it is committed to Addyi, with its sales reps pounding the pavement to educate doctors about the drug. The $200 million Valeant says its spending on marketing and R&D between now and mid-2017 is to cover direct-to-consumer (DTC) marketing, disease awareness, and promotional materials. But the FDA prohibited any DTC advertising for Addyi for 18 months from when it was launched, and by that time, it will almost be mid-2017, so DTC advertising may arrive in a sudden deluge.
Controversy has flurried around Addyi since before it gained FDA approval, with some saying it was a long-awaited treatment to a problem that’s been ignored too long, and others saying it “medicalizes” lack of sexual desire when females have it, and treats it as a psychiatric disorder. Unlike Viagra and its competitors, which address ED in a straightforward manner (by increasing blood flow), Addyi’s effect is more nuanced, so it will take time for its popularity among the general population to become evident – especially priced as steeply as it is at the moment.
eDrugstore.com is committed to helping its more than half a million customers enjoy healthy, active lifestyles. Working with US-licensed pharmacists, we dispense name brand lifestyle medications with competitive prices and the utmost in convenience. We encourage you to learn more about sexual health, including your options for addressing common sexual issues like ED and HSDD.
We specialize in providing our over 1,000,000 customers with relevant product and condition information created by our professional editorial staff which includes our team of medical writers, medical practitioners, and health educators. eDrugStore.com Staff on Facebook