Question-and-Answer Session
Q - Jessica Fye
Let's see here. Of the 10 European countries where you filed marketing dossiers, how do those break down in terms of patient volumes? I don't know if you're going to go through all 10, but maybe which countries do you expect to hear from first, second, kind of when within 2022, could kind of the next couple come online?
Karim Mikhail
Sure. So first of all, the decision for those 10 markets was based on patient population, right? So we basically chose the 10 largest patient population market, they have the big 5, which is Germany, U.K., France, Italy and Spain. Between those 5 markets, you're talking about 60% of the overall patient population in Europe. So that's -- these are the most significant ones. And then everything after those big 5 really becomes a midsized market.
Now in terms of the cadence, it's difficult to speculate at this point in time which 1 will come first, which 1 will come last. Simply because, especially with COVID, there is disruption of the cycle anyway, but it all depends on how negotiation and the price stakes. Certain countries actually have a clock. So if you follow our negotiation with NICE, there are just very clear, simple milestones. Today, we have a public hearing and it's public. So if somebody goes on the NICE website, they'll be able to see minutes and notes. But there are others that are just -- there is no clock that dictates what will happen when.
So we're driving all of them. Some will come in the first half of 2022 and some will come towards the second half of 2022. But we believe 2022 is the year of negotiation, right. This is the year where we are in full-blown negotiation mode, and we hope to get as many of these completed during the year.
Jessica Fye
Turning to more coming in from investors. This 1 is, what is the German price now? And where will it likely settle out if we look out a couple of years I guess maybe asking beyond the free pricing period?
Karim Mikhail
Sure. So in the free pricing period, our price is €240, okay? That's the list price, the rebates in Germany are mandated. So there's no there's no guessing around them. You have 2 single-digit rebates that you have to pay. If you add them up, they are maybe close to 10%, and that's the net you make during this year. After a year, it really depends on how the negotiation goes especially in terms of patient population. So there is this balance that exists, and this is not specific only to Germany. What price are you going to get for which patient population? The larger of the patient population usually the lower price because at the end of the day, the government is calculating the impact on their overall budget. So this is what the negotiation is about. The negotiation is usually you get a government that says, well, listen, if you're willing to discount X percent, I'll give you full access. And if you say, yes, you'll probably have very fast access but listen, no matter what you're never going to reach all of this population, even if you try very hard, right? So where is the balance? Which is the most important patient population? Where you know physicians see the need, where patients are going to stay on therapy and what price is really reasonable? That's what the negotiation is really about.
Jessica Fye
Okay. Got it. Let’s see here. A question about, I guess, the recent COVID surge. How things in Germany and how were they in the fourth quarter with COVID?
Karim Mikhail
I mean, this was definitely completely unexpected. I think not for us, but for everybody, we had our launch event that I attended and many of us flew to Berlin to attend and be with our German team. But basically, Germany was hit very, very hard with Omicron. I remember I had another investor presentation and between the time I recorded it and the time it went live, there were almost 700,000 cases in Germany. So there has been very significant disruption in the German market, literally from November 10 until now. So it has impacted. We cannot deny that. We have to see how things are going to progress in Q1. But for the moment, yes, it's limiting our access to physicians, and we are exploring all sorts of other avenues of how can we still reach and engage physicians, Germany tends to be a traditional market.
So digital is not very infringed unlike the Nordics, unlike some Spain where digital is very entrenched. So yes, it is impacting us. We'll have to wait and see. That's why we were very cautious in showing early results for Germany because it's -- the situation may change in different directions.
Jessica Fye
Thanks for all these questions coming in, everybody. Which statin are you planning for the statin combo? And can you talk a little bit about the degree of difficulty in creating a fixed-dose combination of a product like VASCEPA with a statin?
Karim Mikhail
Sure. So first of all, we have not shared nor disclosed up to now, which statin we're going to go with. I think when you embark on this journey, you have to first demonstrate that you can do 1 step, right? You're not going to go do 2, 3, 4, 5 at the same time because it's a challenging process and it involves money. So you want to do this right, especially that technologically. So second half of the question, how easy or difficult doesn't require a big manufacturing guru to imagine that putting a solid with a liquid together is not an easy thing, right? So technologically, there is definitely a barrier just for layman thinking. We don't need an expert to realize that that's not an easy one.
Having said that, the good news is that the 2 products already have clinical evidence, already have data demonstrated. So the work that has to be done is technological, so it’s manufacturing, stability and bioequivalents mainly and to follow the usual regulatory pathway in the U.S. But it's definitely, I believe, a very big opportunity. If you look overall, in the large cardiometabolic portfolios that were built on top of a statin or on a base molecule, they usually have more than 50% of their business in the combo form at loss of exclusivity. So this can be an important strategy to manage our life cycle over time.
Jessica Fye
I guess this is kind of a manufacturing question. I think applies to your business as opposed to [sharing]. So as you grow volume of VASCEPA, is there enough drug substance available?
Karim Mikhail
Yes. This question, I think, was asked to Amarin back when the REDUCE-IT study was positive and everybody was wondering do we have enough supply because everybody knows that the supply chain is a challenging one. And we had to make sure that we have plans to have enough supply. Today, the reality is we have enough supply. The business is impacted by all what's happening in COVID, even from a shipping perspective, it is impacted. So we are doing our best to manage this balance of having enough inventory but not too much, but not too little, knowing that you don't know what's going to happen over the next few months. So we feel confident of the level that we have, but we continue to monitor it very, very closely. And as a reminder for everyone, I mean this is a supply chain that took Amarin years of investment and years of planning to arrive at where we are today. And obviously, with our plan for a fixed-dose combination, we take that into account because that's still a lot of supply of the mono, right, of the mono just to make sure that we can produce the combo from that.
So we stay very closely monitoring that picture of the inventory.
Jessica Fye
And I guess while we're on this topic of supply, what's your latest diligence telling you about what the supply picture is looking like for the generics?
Karim Mikhail
Yes. So what we've seen over the last 15 months since generic introduction was a steady, slow supply of the generic in the market in the U.S. So if you look at the volumes there is 1 trend that has not accelerated nor decelerated, right? And it was more or less in line with our expectations. And the expectation is, if you want a lot of supply of this product, you need to interest money and it takes time, even if you have the money, right? Just because you need to build the capacity, you cannot go from 1 to 10 in one go. It's just you have to build it over time. So for the moment, there are 2 generics and the 2 generics have supply. We've seen that in the last month, Apotex was listed on [MediSpan] but we have not seen supply on the market, and we have not seen ever listed or bringing any products. We continue to monitor the situation. Our assumptions for the U.S. are built on that curve, meaning that, that curve stays the same in terms of the supply of genetics. So if the supply goes down, then we have definitely an added opportunity. And if the supply goes up, then we have to revisit our plans and see what makes sense. For the moment, where contribution margin positive in the U.S. We were before, by the way, the go-to-market strategy before we go down to 300 reps. Now that we went down to 300 reps, we are still contribution margin positive. But we have to continue to monitor this because there could be unexpected events. And if they happen, we'll address them immediately and take the actions that are needed we are ready to go authorized generic if need be. But for the moment, we have $0.5 billion business and its contribution margin positive. So we're not going to let go of this unless we really see that this is not sustainable, and we're not at this point.
Jessica Fye
Okay. And that kind of steady, slow trend you described of generic uptake. Is that mainly influenced by their access to supply, how much of it is influenced by you're working to kind of get compendious updated to make sure that scripts written for the cardiovascular outcomes indication are not filled with generic products?
Karim Mikhail
Sure. I mean, the sale of any product, not just the generic is impacted, obviously, by supply and market dynamics. So we cannot say, well, if it's mostly supply where it is mostly market dynamic. The reality is if they have more supply, probably they would have pushed it into the market, and it would make an impact, right? Now we are doing everything to protect our business and the indication where we have right and exclusivity. And that's -- we believe it is the right thing to do. So we are educating every stakeholder in the chain from the physician to the payer, to the pharmacist on the fact that generics do not have an indication. And today, we are attractive to payers because of our price that we can offer to them today. And we are making sure that we are attractive to the patient because with Blink, for example, all our patients can benefit from the co-pay of course, who are eligible for using the co-pay card can use it while in the real world, maybe half of the patients don't get to get that benefit, right?
So we're trying to make sure that we maximize the benefit of the patient or the payer, while working in the most professional way within the limit of our indication.
Jessica Fye
Okay. You cited some of the new-to-brand data in your presentation. It looks like it's starting to tick higher in the U.S. even through -- was a pretty challenging kind of end of the year period even without COVID, just going through the holidays. So can you I guess, elaborate a little bit more on how much you're reading into this kind of initial trend?
Karim Mikhail
No, it is 1 quarter, right? So to me, although there are multiple weeks on this curve, it's still 1 quarter. So I take it as 1 data point, right? But it's 1 data point in the right direction and the fact that we reached 8,000 NBRx which we did not achieve for the last 15 months, at least internally, we look at it with our team as an important milestone that the U.S. team is delivering, right? It's bringing back the NBRx, the new to brand level that is needed because without that, we're not tenable. We have to see how we're going to maintain this over time. But we also have to see what's going to happen from a generic perspective, right? Will there be more supply or not, there are a number of unknowns. So it's still early. But again, we received many questions about whether we believe in the go-to-market strategy that we have implemented. And we were just trying to say we see encouraging signs. We will continue to fight this. And if the situation changes, we will take other decisions and we will act accordingly.
Jessica Fye
Can you talk about gross margin for VASCEPA outside the U.S. What does it look like in Europe today? And what do you think it will look like we look out several years?
Karim Mikhail
Sure. So the difference between gross to net in Europe and the U.S. is very, very different. The structure from which you go from gross to net is different, simply because you're -- at the end, your gross, your list in Europe is very important because as to really what the government pays more or less, unless you do a confidential discount. So we have communicated earlier that we believe that our net price in Europe is going to be the same or higher than our net in the U.S. And today, we believe that, that's going to be the case based on the discussions and the negotiations we're having with the different governments, okay?
Now how does the price evolve over time in Europe, the price can only go lower, unfortunately, over time. So you don't have the chance, unlike the U.S. to raise your price at any point in time. That's why it is so critical to start at the most logical premium level because it can only go down. However, it does not go down without prediction, right? So it's very predictable. So in a country like I'm going to give the example of France. France will have a price revision 3 years after launch. So for the first 3 years, whatever you agreed upon, you continue to sell within those 3 years without any price impact, right? The rebates you pay are the rebates you pay, nothing changes during that period of time.
In 3 years, there is a renegotiation that depends very much on the change in realities. Do you have a new competitor that has better evidence and cheaper than you, then you have to lower your price. But if nobody has better evidence than you, then your price is still reasonable. So you may get a 2%, 3% maximum reduction, not more. Now if you cannot defend the price 3 years later because somebody brought a better innovation with a lower price, then it's a tougher fight. But where we stand today, we feel confident that the initial communication that we've had about our price in Europe being higher or the same of our U.S. net, that still stands true.
Jessica Fye
Okay. Great. So we are out of time now. So I'm going to say thank you so much, and thanks, everyone, for listening.
Karim Mikhail
Thank you.
