ASP drug pricing rises --for now

Sunday, April 30, 2006

WASHINGTON - ASP pricing for the second quarter revealed favorable increases for most drugs, but a recent proposal to reimburse brand name drugs like Xopenex at lower generic rates kept providers from celebrating (See story page 1).
"Everyone was breathing a sigh of relief," said Mickey Letson, president of Decatur, Ala.-based Letco Companies. "Now all of a sudden we're hammered by (the proposal)."
With the exception of ipratropium, which fell half a cent to 21 cents per dose, reimbursement was up across the board. Xopenex increased 18 cents to $3.53 per dose.
Surprisingly, DuoNeb reversed a yearlong downward trend, rising 7 cents to $1.09 per dose.
"Why it would have bounced back, I don't know," said Bill Bonello, an analyst with Wachovia in Minneapolis. "I don't know if companies are charging more or if it's just a mix of who they're selling it to in that time period."
The million-dollar question is what will happen if a proposal to reimburse brand name drugs at lower generic rates passes. If that happens, DuoNeb is particularly vulnerable, say industry watchers.
With small providers unable to afford it and large pharmacies losing their incentive to distribute the drug, many predict DuoNeb's days could be numbered.
Don White, president of Associated Healthcare in Amherst, N.Y, said he already loses money on DuoNeb.
"There's no money left on the drug," said White. "I'm not going to go to bat for DuoNeb."
If reimbursement falls, Apria and Lincare, who still enjoy a small profit margin on DuoNeb, could see their earnings per share slip by as much as 16 cents per share, predicted Wachovia's Bonello.