RE: STX - Hardman 16p target26 Nov 2024 16:47
Smyth, not sure if you understand how the NSP works. I'll explain what i am aware of, and happy for others to add.
When this first went to market we were told that the standard NSP would be c$250 a pack (think this is 28 or 30 days supply). However, this would be the charge payable by insurance companies and in the early days insurance coverage was minimal.
To persuade doctors/clinicians to start prescribing it was agreed that a 'cost' price of $25 could be paid for a trial period. This would enable the clinician to see the effect of the product on a patient (low side effects and increased iron levels etc) so they would be more open to subscribing to other patients with similar symptoms.
So if 50% of sales are split insurance v non insurance the average NSP is $137.5.
If the split is 80%, 20% in favour of insurance the av NSP is $205.
So the NSP was always going to increase as insurance coverage increased and more clinicians had prescribed the product.
However, there have been a few bumps on the road, some of which appear easily avoidable .
One is that the insurance claim process seemed quite complex and laborious (probably as a new drug the insurance process wasn't refined) so clinicians were not keen to go via this route. I suspect salespeople were incentivised per prescription regardless of the price so too many went through the discount route even when insurance was possible (to a salesman any sale is better than no sale, regardless of the price) .
I also think this $250 is a guide and probably varies per insurance company. Supposedly 65% of the US are covered by company schemes and 38% are covered by Medicaid and Medicare (is this Obama care?). The other 7% appear to get no care! At a recent presentation i think CEO said Medicare don't cover Accrufer so it appears to be just Medicaid. Almost certainly they are not paying the full price. I think the CFO mentioned accrufer has c60% coverage overall now, so c40% insurance and 20% Medicaid .
The other thing the CEO mentioned was that the discount price is not always charged and is sometimes given for free. This surprised me. So maybe just by stopping these freebies the NSP will automatically increase.
As the covenant threshold is in USD and not prescriptions increasing the NSP is clearly going to increase revenues even if prescriptions volumes remain unchanged. The way i read the RNS prescriptions are increasing but the big jump in NSP is having a material impact on Q4 revenues
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