- Sales of Johnson & Johnson's flagship anticoagulant Xarelto declined 6% in the first quarter of 2019 even as the big pharma has increased its price and doctors have written more prescriptions. The company last week said increasing discounts to 70% for patients in the Medicare "donut hole" coverage gap have hurt revenue.
- Bristol-Myers Squibb and Pfizer's Eliquis is the biggest seller in the Factor Xa anticoagulant class but has yet to suffer the revenue declines that Xarelto has seen. Bristol-Myers is due to report first quarter earnings on Thursday, and Eliquis sales will be closely watched.
- J&J says expanding use of Xarelto into other vascular diseases will help improve the sales picture.
A biopharma adage is that first in class does not mean best in class. When Xarelto in 2011 became the first in a new class of anticoagulant pills to be authorized to prevent strokes in patients with atrial fibrillation, it was seen as a step forward from warfarin, which had a side effect of dangerous and fatal bleeding incidents.
Xarelto's main weakness was that while it reduced the risk of bleeding, it didn't reduce the risk of strokes. When Eliquis came along a year later, it had an advantage: Bristol-Myers Squibb and Pfizer could claim that it reduced stroke and bleeding when compared to warfarin. Its one disadvantage was twice-a-day dosing to once daily for Xarelto.
Over time, the relative characteristics of the two drugs have played to Eliquis' favor. It now has 39% market share to 23% for Xarelto, Credit Suisse analyst Vamil Divan wrote in an April 22 note to clients, citing Iqvia data.
Johnson & Johnson's U.S.-based sales of Xarelto hit a peak of $2.5 billion in 2017 and declined by $23 million in 2018. First quarter 2019 numbers looked disappointing, declining 6% compared with first quarter 2018 to $542 million.
Pressed on the weak sales numbers, J&J executives said that it was because Medicare had increased the discount for patients in the "donut hole" coverage gap from 50% to 70%. Total prescriptions continue to grow, they said.
Xarelto is particularly vulnerable to Medicare payment rates. It counts as the fifth biggest seller in Medicare Part D, with non-rebated sales of $2.6 billion and 953,000 patients in 2017, as reported by the Centers for Medicare and Medicaid Services (CMS).
J&J pharmaceuticals chief Jennifer Taubert said sales can return to growth thanks to a new indication for preventing cardiovascular death and complications in patients with coronary or peripheral artery disease, something Eliquis can't claim. Furthermore, J&J is seeking FDA approval to use Xarelto to prevent blood vessel blockages in patients who are hospitalized for an acute illness.
When Bristol-Myers reports earnings on April 25, investors will no doubt be looking to see if there are any signs of weakness in Eliquis sales. Given the condition it treats, Eliquis is vulnerable to Medicare discount requirements too. It was the second-biggest seller in Medicare, with a reported $3.1 billion in non-rebated sales and 1.1 million patients, according to CMS.
Credit Suisse's Divan wrote that analyst forecast consensus puts Eliquis first-quarter U.S. sales at $1.1 billion, a 22% year-on-year increase. If J&J's Xarelto sales are any indication, Bristol-Myers needs its robust sales expansion to continue if it wants to offset Medicare's new discounts.