AVANIR PHARMACEUTICALS (AVNR)

[sts66]

Dunno if/when this is going to affect AVNR, but it's something to look out for - huge news out today that crushed one of my other bios, POZN, which currently sells two combo drugs of generics, Treximet and Vimovo (via HZNP) - CVS and Express scrips just announced that they are removing the latter from their formularies, which chops ~ 30% of the patient population off from Vimovo:

Pozen feels Horizon's pain • 12:23 PM

Shares of Pozen (POZN -14.4%) get smacked down on a 2x surge in volume in sympathy with Horizon Pharma's (HZNP -33.2%) bad news. Pozen earns a 10% royalty on Vimovo sales.

Recent article describing affect of the ACA on insurer's formularies:

http://www.nytimes.com/2014/06/21/business/health-plans-bring-pressure-to-bear-on-drug-prices.html

In dealing with health plans, drug companies are facing a new imperative — bargain or be banned.

Determined to slow the rapid rise in drug prices, more health plans are refusing to cover certain drugs unless the companies charge less for them.

The strategy appears to be getting pharmaceutical makers to compete on price. Some big-selling products, like the respiratory medicine Advair and the diabetes drug Victoza, have suffered precipitous declines in market share because Express Scripts, the biggest pharmacy benefits manager, recently stopped paying for them for many patients.

“There’s clearly more price competition in the marketplace,” Andrew Witty, chief executive of GlaxoSmithKline, said, talking about Advair in a recent company earnings call.

Executives of pharmacy benefit management firms say they must do something to cope with rising prices, particularly for so-called specialty pharmaceuticals, which are used to treat complex diseases like cancer and multiple sclerosis.
Continue reading the main story

Spending on specialty drugs rose 14.1 percent last year and by even greater amounts in previous recent years, according to Express Scripts. Most of that increased spending comes not from new drugs or new patients, but from price increases on older drugs that can often exceed 10 percent year after year.