Wholesale price is actually $195, see below. I believe this is set in stone, for the wholesaler. I don't know, for example BASF is turnkey or not. I would imagine the manufacturer also handles distribution to Pharmacies. Net price/Gross margin can vary because of COG, COG has already declined quite a bit from last year. I just used a conservative wholesale price because it's stable, probably will not change much over the next year or two. net cost is not a stable price, I can not use it as a reference. Just trying to track progress on script numbers, the calc came pretty close to the reported rev. But you know this can be very difficult as far as accuracy goes.
The wholesale price for 120 capsules or one-month supply of Vascepa is $195.04 compared to $198.50 for generic Lovaza and $229.75 for branded Lovaza. The price for the branded Lovaza reflects the recent price increase from its manufacturer. Vascepa is not AB rated to Lovaza, it is not substitutable and provides patients with unique clinical attributes. As a reminder, Lovaza is comprised of 84% EPA and DHA.
Revenues reported in Q1 2014 reflect the benefit of a change in revenue recognition methodology such that we are now recording revenues based on shipments to our customers otherwise known as a sell-in method as opposed to the sell-through method, which is our basis of accounting in 2013.
This change, which was expected and is consistent with the recording for newly-launched drugs by other company, resulted in the elimination of deferred revenue and establishes that our revenues are now recorded based upon sales to our customers and not based upon their resales of products. As we recorded revenues for Q1 2014 based on the prior sell-through method, revenues for the 3 months ended March 31, 2014, would have been approximately $10 million. Cash collections in the sale of Vascepa in the first quarter of 2014 were approximately $11.6 million. Gross margin during the quarter ended March 31, 2014 was 61% as compared to 45% in Q1 2013. The majority of the Vascepa capsules including cost of goods sold in both periods, included API sourced from a single API supplier. Amarin's purchases of API from the supplier are at a higher cost per kilogram level and purchases of API from our other approved suppliers, and has resulted in an unusually high cost of goods sold as a percentage of revenue. We expect our gross margin percentage to improve further as we increase purchase volumes and source lower cost API. As we work through the cost of previously purchased inventory, most of this anticipated future improvement gross margin will be visible beyond 2014. The timing of purchases of lower cost API is subject to multiple variables including qualification and approval of expanded capacity for the Slanmhor and Novasep consortium, potential renegotiation of certain minimum purchase requirements for certain suppliers and whether or not certain suppliers can achieve the high quality standards we require for Vascepa.
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