Sepracor slow-pays rebates

Friday, November 30, 2007

MARLBOROUGH, Mass. - Rebates for Sepracor's respiratory medications Xopenex and Brovana have been slow to materialize, say providers.
"A lot of providers have been forced to stop dispensing the products because the out-of-pocket cost is extremely significant for such a small margin product," said Mickey Letson, president of Decatur, Ala.-based Letco Companies. "These are not big businesses. They cannot afford to be out $20,000, $40,000 or $50,000 in rebates."
Sepracor began offering the rebates as an incentive to promote new product Brovana and to continue providing Xopenex after a change in Medicare policy sent payment--and sales--for the drug plummeting.
In July, Medicare--which comprises 25% to 30% of Xopenex sales--bundled Xopenex and generic albuterol under the same code, causing reimbursement at that time for Xopenex to plunge from $3.84 per dose to $1.31, while albuterol shot up from 20 cents a dose. In October, the average sales price slid further--to $1.05.
On Oct. 30, the drug maker announced Xopenex sales were $94.4 million for the third quarter, compared to $125.4 million for the same period in 2006. Sepracor also announced that it would be cutting about 300 sales positions and instituting other cost-cutting measures as it looks ahead to 2008. Sepracor had not responded to a request for comment by press time.
One provider who dispenses Xopenex doesn't promote the drug.
"We're into them for a lot with Xopenex," he said. "Sepracor's slow-paying the rebates and that's the only way to make money."
Wayne Vega, a consultant with Acadiana, La.-based Stat Vial, said Sepracor has acknowledged the rebate problem.
"There are apologies on behalf of Sepracor," said Vega. "Apologies but no checks."