Any news? It is down big time per market.

From 8-K filing…

We have been verbally notified that in August 2014, two pharmacy benefit managers (“PBMs”), CVS Caremark (“Caremark”) and Express Scripts, Inc. (“ESI”), expect to announce DUEXIS? and VIMOVO? will no longer be on their formularies and will be placed on their exclusion lists effective January 1, 2015.

As a change in Caremark and ESI formulary status would not take effect until 2015, we do not expect this potential action to impact our financial guidance of $270-280 million for net revenues and $80-90 million for adjusted EBITDA for fiscal 2014 as provided in our first quarter earnings press release dated May 9, 2014.

I wonder what prompted that? Too expensive?


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I meant to include this link…


It goes on to say…

In response to potentially being placed on Caremark’s and ESI’s exclusion lists, as we have with any other payor exclusion list, we will immediately accelerate our patient and physician focused commercial model to focus prescriptions through other channels such as our Prescriptions Made Easy (“PME”) program, continue working with many of the more than 60 other PBMs and evaluate price increases. We estimate approximately 20%-30% of DUEXIS and VIMOVO prescriptions could be impacted by the potential actions by Caremark and ESI. In the future, if additional healthcare plans adopt the Caremark or ESI exclusion lists or otherwise exclude DUEXIS or VIMOVO from the formularies they use, which they are not required to do, there could possibly be additional DUEXIS and VIMOVO prescriptions affected. We believe our strategy can allow us to mitigate the effect of this event on the DUEXIS and VIMOVO business and can enable further growth in the revenue of DUEXIS and VIMOVO from current levels, particularly given our relatively nominal share of the NSAID market.

We expect to provide fiscal 2015 financial guidance in the fourth quarter, which will incorporate the effects, if any, of the potential actions by Caremark and ESI.


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Exclusion list. what does it mean? Does it mean the drugs are not medically necessary and there are cheaper alternatives that are as good? If the insurance is not going to pay, what is the good to go to the docs and patients?



My understanding is that HZNP essentially blends two pills into one. For example, if a particular heart medication has a tendency to cause upset stomach, then they’ll combine the heart medication with a pain reliever. Their argument is that patients are less likely to take both medications and if they don’t take the pain reliever, then they will eventually stop taking the heart medication after they realize it is the cause of their upset stomach, which can obviously cause it’s own set of problems. By combining into one, the patient will be much more likely to stay on the medication.

HZNP makes its money by charging a huge markup on this medication and it’s much more costly than using two separate medications. ESRX and CVS, likely due to pressure from insurance companies, have decided that they will no longer reimburse for these types of hybrid medications. Who knows what the long-term impact will be - if the HZNP thesis is correct, then eventually the increased medical costs paid by insurers as people stop taking medication will far outweigh the increased cost of this drug. However, even if that happens, will HZNP actually still be around to reap the benefits?

That’s my understanding of the situation. Of course, I could be mistaken on all or part of it. I could never get comfortable with the risk which is why I never bought any shares.


Duexis is ibuprofen mixed with pepcid. Both can be bought over the counter. I saw the first patient I have seen with this prescription last week. She did not know what is was exactly, but payed a 30$ copay for 30 pills (twice daily drug), and said the script would have been 600$. I have no idea if that is the correct price but both of these meds could be had in quantity for half of her copay. Now would someone use them correctly? An acid blocker (Pepcid), will prevent ulcers (probably) that may come from use of NSAIDS (non-steroidal antiinflammatories, Ibuprofen in this case). The argument is that if even a few people take them wrong you will get a few ulcer issues.

Vimovo is Naproxen (Aleve), mixed with esomaprazole (Nexium). Nexium is at least a prescribed drug although others in same class like Prilosec OTC can be had off shelves. Same issues. I have no idea how much this cost.

I admit if this lady’s story was true, a 30$ copay on a 600$ prescription for two over the counter drugs is pretty crazy. Doesn’t mean it won’t get prescribed, it did in this case. Happens with BP meds all the time.

This is a fairly good case for what is crazy in our healthcare. Doesn’t mean it won’t work for the stock though, these kind of things go on in multiple different forms.

If I was an insurance company it would be crazy to pay those prices.



This news on HZNP is the kiss of death. Volume on the downside is monstrous.

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I agree. I decided to exit and call it a day. Other insurance companies will also cancel coverage. In retrospect (where it’s always easier to see), it was a mistake to be invested in this company. I could see the same problem occurring with GILD, which I have avoided.


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I was referring to HZNP, not SYNA.


I could see the same problem occurring with GILD

I think at some point there will be some hi level negotiating w/ GILD and the Sovaldi price will get reduced in exchange for certain commitments [purchases] and the stock will soar.

The selling at such a quick and drastic loss is hard for those, like me, that are late to the party, even if the dollars invested are small. I want to say, “just maybe I can get a bit of that $300-400 loss on my $1000 investment back”. However, the lost time does sometimes end up with commensurate lost positive returns/price appreciation of having ‘pulled the pin’ and taking that big ugly loss.

The Buy/Sell decisions have to be logical, rational, reasonable, and principled. Does HZNP have any other positive catalysts? Has the whole story turned negative? This was the ‘one-trick’ of this pony?

But… What will my wife and children say?!? Oh the drama and dilemma of the world of investing.


Trying to decide what to do with HZNP. I just bought some more last week based on growth projections and price targets. I had looked briefly at what they are selling but didn’t know how much they were charging for it until some posts here today. Then I go to their website to try to see how serious the impact is likely to be and realize they are one of these companies being talked about so much recently in that they did a reverse merger with an Irish company to avoid taxes (an inversion), even though most of their business is (was?) here in the U.S.

I’m starting to feel that maybe they are getting what they deserve and I’m not wanting to own the company so much. If I saw a recovery from this I’d still think about holding. I’m in it to make money…but I also like to feel good about companies I buy into.

I sold out of EBIX back when the shorts started attacking as much because I found that they were buying up other companies and off-shoring jobs as much or more than any of the reasons given by the shorts. It was good that I did, since it only went lower.

I’ll probably be selling HZNP and putting my money elsewhere.


I sold my small position. Kicking myself for doing something where the company does not treat the consumer with respect. In this case you could say there are two consumers the insurance co and the patients. I think they may come out with a greatly reduced price and find a market. Compliance is a problem. I take an unfortunate number of medications, and the dosages change a lot. I starred seeing an increase of my BP and thought is was a side effect of my drug combo. But it turns out I was leaving a drug out, a BP med, when I was setting up my weekly meds. Even when you are really careful compliance can be a problem…

So a combo pill can make sense, at a sensible price.

Gild is a much bigger problem 84K makes my public policy self unhappy, especially at first glance. But there is no escaping the fact that the scientists who work on these breakthroughs must earn a living, and those of us putting up the capital will only invest for the potential reward… And the cost for a liver transplant is what, a half a million? $84k is looking better.

I do think the country needs to have a larger conversation about costs. The recent cystic fibrosis drug is not a cure and it is $300,000

Last 1/4 Sovaldi represented 50% of GILD rev.

There are more drugs coming on line for GILD [cancer].