And the hits just keep on coming

And the hits just keep on coming

Never let it be said that Diabetic Investor is the sharpest knife in the drawer but we do know that when a company is struggling to gain more share it’s normally not a brilliant idea to raise prices. That is unless the company is Sanofi (NYSE:SNY) and the product we’re talking about is Apidra®. Now just in case anyone has forgotten about Apidra and given how poorly it has done in the market we can excuse anyone who has, this is exactly what is happening. According to a company memo obtained by Diabetic Investor effective last week they have raised the wholesale price for this dog of a drug.

Now call us crazy, and many have, but just how the company sees this helping matters any is anyone’s guess. By any measure Apidra is well behind market leaders Humalog and Novolog, something that has been the case since Apidra came into the market. The simple fact is and yes we know Sanofi, Lilly (NYSE:LLY) and Novo Nordisk (NYSE:NVO) will disagree with this but there really isn’t much difference between all three short-acting insulin’s. One thing they will agree on, or at least Lilly and Novo will, is that share is not determined by performance but by price.

Just go back and listen to the most recent earnings calls for either Lilly or Novo, and what are they complaining about, intensifying pricing pressure. How they must compete even harder to maintain share. That the last thing they are able to do is pass through a price increase. How payors are demanding and receiving either lower prices or greater rebates.

Again Diabetic Investor may not be the brightest blub on the tree still we cannot fathom how Sanofi sees increasing the price for a drug that’s third in a three horse race will do anything other than increase the gap between it and the two leaders in the race.

Now we don’t know which genius at Sanofi came up with this brilliant strategy but this is what we would expect from acting CEO Serge Weinberg. A guy who seems to relish in making life more difficult for the sales people he so publicly lambasted. Although we were not privy to the discussions that went on internally we can just imagine that this decision was made after a long wine drinking session. Listen after a few good bottles of wine even the Knicks look a championship caliber NBA team.

Honestly since the tragic events that occurred in France Diabetic Investor really wanted to give our French friends a break. That it would be unprofessional and unfeeling to continually comment on the ongoing soap opera going on at one of their premier companies. However it would just as unprofessional if we did not comment. Frankly we have no idea what management is thinking and our guess is they aren’t so sure either.

Now we hate to be redundant but do we really need to explain again why we call this the wacky world of diabetes.