Sanofi Rumored to Be Freezing Hiring of Sales Staff for Inhaled Insulin Product Afrezza; MannKind Corporation Exec Denies It
October 23, 2015
By Mark Terry, BioSpace.com Breaking News Staff
Rumors are spinning that Sanofi has frozen hiring for the sales team for its inhaled insulin product, Afrezza. Sanofi, however, did not confirm when contacted by in-PharmaTechnologist.com.
Matt Pfeffer, chief financial officer of MannKind Corporation , Sanofi’s partner and developer of Afrezza, told in-Pharma that Sanofi’s marketing approach was solid. “We have seen no indication that they are faltering in their commitment to the product — quite the contrary, in fact. The only changes [in sales force numbers] I am aware of have been increases. There are certainly people out there with a vested interested in our not succeeding. This would not be the first time misinformation has been circulated about us or about Afrezza.”
Early in 2014, the U.S. Food and Drug Administration (FDA) approved Afrezza, an inhaled form of insulin. Generally speaking, this seemed like a great idea for a product to treat diabetes because it would eliminate the need for needles. Not only do most people not like taking shots, but in some cases they’re very inconvenient depending on lifestyle or work situations.
Sanofi’s part of the relationship with MannKind is commercialization, and hence, negotiations with insurance companies regarding reimbursement and pricing. Which is where Afrezza is apparently running in to what some analysts suspect will be short-term issues.
Insurance companies generally classify drugs in four tiers, 1 through 4. Tier 1 drugs are usually low-priced generic drugs. Tier 2 is typically a preferred brand name prescription drug. Tiers 3 and 4 are, as described by Joshua Rodriguez, founder of CNA Finance, “for higher cost prescription medications and medications that may be deemed to be effective but not the best choice for most patients.”
As Rodriguez points out, MannKind and Sanofi want Afrezza to be in Tier 2. But for most insurance companies, it’s listed in Tier 3. “This means that consumers who would like to try MannKind’s product will have to pay a higher co-pay and possibly deal with restrictions, which is harming sales volume on the treatment.”
This is likely at least part of the reason initial sales of Afrezza have been slow. Rodriguez predicts that the drug will likely get shifted to Tier 2 in 2016, which would be the result of negotiations between Sanofi and insurance companies.
In MannKind’s second quarter earnings report, Hakan Edstrom, chief executive officer of MannKind, said, “…insurance coverage continues to slow the process. At this point, permanent formulary placement decisions have not yet been made by most plans. These decisions are typically made six to 12 months following the launch.”
And as Rodriguez further points out, there are an estimated 28.7 million diabetic patients in the U.S. alone, with reportedly 10 percent of them afraid of shots. So there are — at least — a potential 2.9 million possible customers for Afrezza, although due to work-related issues, that number may be more like 4.2 million. And even for people who are accustomed to injections, it’s unlikely they like shots, and might prefer an inhaled version. The market’s clearly there.
The rumors about the sales force come only a couple weeks after MannKind announced it was laying off workers at its Danbury, Conn. facility. Pfeffer at the time told The News-Times that the cuts were ongoing efforts for “right-sizing the company to reflect anticipated demand and operational needs. These reductions affected all of our sites, both here on the east coast as well as California, and affected all levels of management in the company.”
Possibly Sanofi will reveal more of its plans in its third quarter 2015 results on October 29.