We have been posting (see here and here) on Genzyme’s possible treatment for Multiple Sclerosis, Campath, or as it is now being marketed, Lemtrada. Campath is a drug used to treat certain types of cancer but now Genzyme is looking to sell it for the treatment of Multiple Sclerosis. They think they can reach around $3 billion in sales doing so as well.
To get an idea of how much money is already involved in the marketing of this drug, which still has not received FDA approval, I found an article at PR Week where it was reported, back in December of last year, that Genzyme had already engaged a PR firm, Cohn & Wolfe, to help in their “global pre-launch communications,” of the drug.
Genzyme has said that the drug could generate between $3 and $3.5 billion in annual sales by 2017. That is, simply, a lot of money for one drug. But, considering what the CEO of Genzyme, Henri Termeer said of the market for Multiple Sclerosis, they obviously have very high expectations for their drug:
Termeer also noted that the overall market for multiple sclerosis is $14 billion, and Genzyme executives said their research showed there is significant demand for new treatment options. Alemtuzumab, they said, is more effective, convenient, and easier for patients to tolerate than drugs now on the market.
We agree with Mr. Termeer that there is a very significant demand for new treatment options, especially ones that don’t just manage the disease (or cause other debilitating diseases in the process, see Tysabri and brain infection, PML), but ones that could actually cure the disease. It’s why so many people with MS are looking at the new liberation treatment for CCSVI with great hope.
To get an idea, a glimpse if you will, of how much Genzyme (or Sanofi, if the take-over does succeed) will charge for their still unapproved Multiple Sclerosis treatment of Campath/Lemtrada, a little mathematics and some fact gathering is in order.
Remember, Campath/Lemtrada is still a relatively inexpensive drug, especially for the treatment of Multiple Sclerosis, since the amount of the drug used is much smaller than for the treatment of cancer. So for Genzyme to be touting the market in the billions, we wanted to get an idea of how much they think they can charge.
We’ll start here with the population of the United States. It is, roughly, 310 million people. One report has it at 307 million, while this from the Census Bureau has it at 311 million. We’ll use 310 million as a mid-range, easy-to-calculate number.
Of that number, roughly 400,000 people have been diagnosed with MS. No one really knows how many people have it, according to the National Institutes of Health. My number is being a bit generous, by about 50,000, to play it safe.
What I found is, based on my numbers, roughly, .1% (that is point one percent) of the population of the United States has Multiple Sclerosis.
Based on Mr. Termeer’s number of the Multiple Sclerosis market being around $14 billion globally (I am assuming globally here) then Genzyme hopes that this one drug will corner around 21% of the global Multiple Sclerosis market–$3 to $3.5 billion of a $14 billion market.
And it still has not been approved. And they’ve hired a PR firm to help in pre-launch communications. Are they this certain? There are high expectations for this one drug and it seems there are even higher expectations on the pricing of this drug.
How much does Genzyme have to charge to gain 21% of the market?
Genzyme will either have to corner a very large share of the Multiple Sclerosis market by 2017, unless a cure is found before then, or raise the sales price of the drug for Multiple Sclerosis patients to hit those numbers.
Campath now generates roughly $112 million in sales for Genzyme* (2008 sales figures) so to get to $3 billion, that would have to be, roughly, a 97% increase in price combined with a deep market reach.
But how many people have Multiple Sclerosis and more importantly how many people globally with MS have access to adequate health care? Who can afford this?
The numbers on those questions remain elusive. We think that Genzyme sees its billions coming from raising the price of this relatively inexpensive drug to the price shared by the drug, Gilenya (which was first synthesized in 1992 for use in organ transplants),which is the most expensive Multiple Sclerosis treatment available at $48,000 per year.
It would be more humane (if this drug does get FDA approval) for Genzyme to keep their expectations of achieving a $3 to $3.5 billion share of a market more in line with reality and with what people with Multiple Sclerosis have to go through–from a body that is leaving its sufferers frustrated and debilitated, to insurance issues like the ones you see here.
After all, spin and PR it any way you want, Genzyme (and Novartis, since Gilenya or Fingolimod is relatively cheap to synthesize), its investors and executives are hoping to make money as the Multiple Sclerosis market grows–betting more will be diagnosed and suffer its effects–and then more money will be made from a drug that is, after all, relatively inexpensive for the treatment of MS in the first place.
How much money is too much?
*I could only reach the cached version of the article I quoted. Here is the original link:
http://www.bioworld.com/servlet/com.accumedia.web.Dispatcher?next=bioWorldHeadlines_article&forceid=50472 It is a snapshot of the page as it appeared on Dec 29, 2010 23:18:07 GMT. The current page could have changed in the meantime