Narat's explanation on Adderall sales was good:
Okay. I don't want us to blame Lannett, or be tough on Lannett because I do believe they are doing a decent job from the standpoint of sales and marketing. So let me frame this in the right form. Amphetamine IR has 11 competitors. Each and everyone is trying to outbid the other and get into the top companies, CVS, and Walgreen, and Walmart, and Cardinal Health, and McKesson. And there are 8 competitors in ER.
The first problem we encountered if you recall, was the delayed entry. President Trump shut down the government, the FDA did not have resources, and they actually delayed our application by a year. We were supposed to be number four. When you give somebody a product that there are three other competitors and you're number four, it's a little bit of a fight, when you give them eight competitors, it's a much bigger fight. We don't want to blame Lannett, we got to where we got, and by that time we were one of eight. There was rationing of control services at the time.
That had minimal impact, not really much. But the last portion is the market penetration. So let me explain that. In my days at Actavis, whenever we have market penetration, we waited when the bids came on. Let's say, for example, CVS. CVS does not call people every single day to see if they can buy drugs from them cheaper.
They have you bid on certain products or products once a year. For the rest of the year, you got that contract till they come in late and say, what have you done for me lately and try to negotiate a lower price with you or they put it forbid with others. So when a product is only a little more than a year old, it tells you that Lannett has only had 1 or 2 shops getting in, and every single time you bid, you learn from that and see how you need to go lower or higher, or how to adjust the pricing.
Now, they have penetrated very well into the IR market, way beyond my expectations because frankly, the first approval was maybe in 2012, and we didn't get into the game until much, much later. I expect them to do the same with ER, it's just a matter of time, and I expect, as I said earlier, the revenues and profit split from the IR and ER will grow.
