Inside The Secret World Of Drug Company Rebates
`
`https://www.forbes.com/sites/matthewherper/2012/05/10/why-astrazenec...
`
`/
`
`Pharma & Healthcare
`
`MAY 10, 2012 @ 09:54 AM
`
`85,899 
`
`The Little Black Book of Billionaire Secrets
`
`Matthew Herper, FORBES STAFF 
`I cover science and medicine, and believe this is biology's century. FULL BIO
`
`Continued from page 1
`
`Caveats: there are other factors that could be affecting the difference, including if drug wholesalers
`are buying up extra inventory of a medicine, temporarily boosting sales. But generally speaking, I
`think we can assume that the bulk of these differences are from the rebates.
`
`In the table in this story, I've calculated the difference between the IMS numbers and the numbers
`reported to the S.E.C. If U.S. sales were not immediately available, I took them from reports from
`sell-side analysts. The resulting figures show how greatly the numbers vary and give some hints as
`to why.
`
` seems to have given a lot of rebates to keep
`In the face of sudden generic discounts, Pfizer
`PFE -1.18%
`Lipitor on insurance company formularies, giving up 35% of gross sales, up from 26% last year.
`(This matches up with reporting I did here; promotion of Lipitor is finally grinding to a halt.) By
`contrast, Bristol-Myers Squibb and Sanofi-Aventis, the makers of Plavix, only gave 2.6% of sales in
`rebates; Plavix was until now the only medicine of its kind, and competitors from Eli Lilly and
`AstraZeneca have been unable to unseat it.
`
`The most stunning discount is for Nexium, the purple pill for heartburn sold by AstraZeneca and
`derided by many as the perfect example of a me-too drug. Astra is giving back 60% of gross sales,
`most likely in the form of rebates. IMS lists Nexium as the third-best-selling drug in the country
`based on gross sales of $6.2 billion. But AstraZeneca reports U.S. Nexium sales of just $2.4 billion,
`putting it more on a par with Eli Lilly's cancer drug Alimta than behemoths like Lipitor and Plavix.
`
`Why? As much as people rail against me-too drugs, being a me-too med is actually bad for the
`company, too. Insurers may be using the fact that they could direct consumers to generic Protonix
`or over-the-counter Prilosec or Prevacid as a bargaining stick, forcing Astra to cede ground.
`
`Medicines in the same category seem to have the same level of discount. Astra's Crestor, a
`cholesterol drug that competes with Lipitor, seems to be giving 30% in rebates. The antipsychotics
`Seroquel (sold by AstraZeneca) and Abilify (from Otsuka & Bristol) give rebates of 27% and 24%,
`respectively.
`
`AstraZeneca spokeswoman Stephanie Andrzejewski wrote via email that the company would not
`"discuss or disclose specifics around rebates" for Nexium. She added: "What I can tell you is that
`AstraZeneca is committed to helping people get the medicines they need and we understand our
`medicines won’t do patients any good if they can’t access them." She said it would be "inaccurate"
`to say AstraZeneca gave a 60% discount "across the board" – which is true. That appears to be the
`
`1 of 2
`
`10/30/2017, 12:25 PM
`
`Page 1 of 2
`
`ACRUX DDS PTY LTD. et al.
`
`EXHIBIT 1580
`
`IPR Petition for
`
`U.S. Patent No. 7,214,506
`
`

`

`Inside The Secret World Of Drug Company Rebates
`
`https://www.forbes.com/sites/matthewherper/2012/05/10/why-astrazenec...
`
`/
`
`Pharma & Healthcare
`
`MAY 10, 2012 @ 09:54 AM
`
`85,899 
`
`The Little Black Book of Billionaire Secrets
`
`Matthew Herper, FORBES STAFF 
`I cover science and medicine, and believe this is biology's century. FULL BIO
`
`Continued from page 1
`
`Caveats: there are other factors that could be affecting the difference, including if drug wholesalers
`are buying up extra inventory of a medicine, temporarily boosting sales. But generally speaking, I
`think we can assume that the bulk of these differences are from the rebates.
`
`In the table in this story, I've calculated the difference between the IMS numbers and the numbers
`reported to the S.E.C. If U.S. sales were not immediately available, I took them from reports from
`sell-side analysts. The resulting figures show how greatly the numbers vary and give some hints as
`to why.
`
` seems to have given a lot of rebates to keep
`In the face of sudden generic discounts, Pfizer
`PFE -1.18%
`Lipitor on insurance company formularies, giving up 35% of gross sales, up from 26% last year.
`(This matches up with reporting I did here; promotion of Lipitor is finally grinding to a halt.) By
`contrast, Bristol-Myers Squibb and Sanofi-Aventis, the makers of Plavix, only gave 2.6% of sales in
`rebates; Plavix was until now the only medicine of its kind, and competitors from Eli Lilly and
`AstraZeneca have been unable to unseat it.
`
`The most stunning discount is for Nexium, the purple pill for heartburn sold by AstraZeneca and
`derided by many as the perfect example of a me-too drug. Astra is giving back 60% of gross sales,
`most likely in the form of rebates. IMS lists Nexium as the third-best-selling drug in the country
`based on gross sales of $6.2 billion. But AstraZeneca reports U.S. Nexium sales of just $2.4 billion,
`putting it more on a par with Eli Lilly's cancer drug Alimta than behemoths like Lipitor and Plavix.
`
`Why? As much as people rail against me-too drugs, being a me-too med is actually bad for the
`company, too. Insurers may be using the fact that they could direct consumers to generic Protonix
`or over-the-counter Prilosec or Prevacid as a bargaining stick, forcing Astra to cede ground.
`
`Medicines in the same category seem to have the same level of discount. Astra's Crestor, a
`cholesterol drug that competes with Lipitor, seems to be giving 30% in rebates. The antipsychotics
`Seroquel (sold by AstraZeneca) and Abilify (from Otsuka & Bristol) give rebates of 27% and 24%,
`respectively.
`
`AstraZeneca spokeswoman Stephanie Andrzejewski wrote via email that the company would not
`"discuss or disclose specifics around rebates" for Nexium. She added: "What I can tell you is that
`AstraZeneca is committed to helping people get the medicines they need and we understand our
`medicines won’t do patients any good if they can’t access them." She said it would be "inaccurate"
`to say AstraZeneca gave a 60% discount "across the board" – which is true. That appears to be the
`
`1 of 2
`
`10/30/2017, 12:25 PM
`
`Page 1 of 2
`
`

`

`Inside The Secret World Of Drug Company Rebates
`
`https://www.forbes.com/sites/matthewherper/2012/05/10/why-astrazenec...
`
`average discount.
`
`The good news here is that, in the world of health insurers and drug giants, the free market is
`having an effect on drug prices. The bad news is that you have to be participating in this market by
`being insured in order to get those reduced rates. People who walk in off the street pay full price.
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`2 of 2
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`Page 2 of 2
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