Medicure buys U.S. mail-order pharmacy

Hey there, time traveller!
This article was published 30/12/2020 (2087 days ago), so information in it may no longer be current.

Medicure, the independent Winnipeg cardiovascular drug company, has acquired a small U.S. mail-order pharmacy to help it sell its cholesterol-lowering drug direct to consumers.

Medicure will pay US$6.3 million for the business, called Marley Drugs, located in Winston-Salem, N.C.

Albert Friesen, the founder and CEO of Medicure, said buying a mail order pharmacy is an innovative approach to gain traction in the market for its statin, Zypitamag.

Brand name statins like Lipitor and Crestor as well as generic statins that are taken once a day are huge sellers.

Clinical data shows that Zypitamag does not have the side effects, like muscle pain, that the others do. It also has fewer side effects sometimes caused when statins are taken with other drugs.

Medicure acquired the U.S. and Canadian rights to the drug from an Indian company one year ago.

“To market it in the U.S. you typically want to have insurance coverage but to get insurance coverage has been challenging,” he said.

Right now more than half of Medicure’s sales of Zypitamag are from customers paying cash.

“Many insurers said if you sell if for $500 for 90 days they would cover it but we want to sell it for $100 for 90 days,” said Friesen.

In the U.S., pharmacy benefits managers act as the middle men between the insurance companies and the pharmacists, and for independents like Marley they effectively increase costs.

Marley started as a traditional mom-and-pop pharmacy, but founder Dave Marley branched out after some of the dynamics of the expensive U.S. pharmaceutical system started making it harder for him to survive. That was why he started branching out into mail order a few years ago.

“It was inspiration out of desperation,” Marley said.

Among other things, Marley offers about 100 inexpensive, mostly generic drugs that he can acquire at a low cost and then sell to patients who buy six months’ supply at prices they can’t get anywhere else.

He said, “Medicure shares our moral mission to cut drug costs for consumers. Since 2012, we have offered Marley’s Extended Supply Generic Drug Program, which was designed to battle the skyrocketing costs of name-brand drugs, and offer patients affordable alternatives, without increasing co-pays or limiting access to popular generics.”

The company has permits to sell all across the U.S. generating modest profits, likely more than enough to cover off the bank financing Medicure secured to make the acquisition.

Now all Medicure needs to do is start convincing U.S. doctors to prescribe Zypitamag to their patients. Friesen said the company was already working on a plan to build its own novel distribution platform to sell direct to consumers when it came across Marley Drugs.

“Because of the challenges in the U.S. we were looking at setting up our own pharmacy distribution system,” Friesen said. “This jump-starts that. It would have taken us a year and a lot of money to set up our own.”

Medicure has seen sales of its main revenue generator, Aggrastat, a hospital-administered drug for heart attack patients, plateau and start to slide as lower cost generics have come on the market and hospital procedures have slowed down during the pandemic.

The company also has other drugs in the development pipeline, but it is confident that Zypitamag has the potential for as much as $15 million in sales by 2023.

martin.cash@freepress.mb.ca