Duke/NS/Rose
The last time I calculated, Amarin had about 4 years of sales sitting in inventory and were paying 10s of Millions to get out of commitments to purchase more API. If Teva made an AG they would use up Amarin’s excess inventory and no way Amarin would allow them to use API from an additional supplier, especially CHINA.
I calculated Teva brought in about 400,000 bottle’s worth of IPE just in the month of January.
It’s a concern. It will hit the US market as a gV, and probably soon. They will have to offer it at a discount to current gV to penetrate the market and get sales. The other generics will drop prices to keep sales. Amarin will have to drop their price to keep sales. Margins all around drop.
Generics made from standard chemicals in a lab, like Lipitor, Crestor, ramipril, metformin etc are cheap and easy to make. Lots of generic manufacturers make them. They cost a few cents to make. These have low margins because of heavy competition, where volume makes then worthwhile. IPE requires fish, high tech processing and is not easy to make. Amarin’s cost is under $30/bottle and they sell for over $100. Generics costs may be 50% higher (for example, no evidence to support that) but they are selling for a few dollars cheaper. That is still a good margin for generics. I doubt Teva is thinking of getting out of gV market. They will be exiting the small molecule business.
I talked to my Apotex rep who launched generic Janumet XR (Januvia and Metformin). It used to be they got 70% of brand price as first to launch, after 6 months other generics could launch and the price reimbursed by government dropped to 40%. New law passed that generics get 50% at launch, then 25% when others generic’s launched, which will be gradually reduced to 18% over the next 5 years. He was very pissed off. Payers everywhere are starting to squeeze generics. That is why Sandoz and Teva are changing their business plans. It won’t help Amarin.
