Summary
Exubera is the first major product to fail primarily due to Pfizer's inability to convince payors of it's value for money There is now significant additional risk in achieving market access after regulatory approval. Pricing and reimbursement decisions will play an increasingly important role in the commercial success of companies going forward.
Analysis
There have been a number of reasons put forward for the withdrawal of Exubera but none have focused on the palpable failure of Pfizer to convince payors and reimbursement agencies of the value of inhaled insulin.
Pfizer's decision to withdraw Exubera is a startling example of the increasingly tough pricing and reimbursement environment. Denied reimbursement in Germany and limited to ~2% of the regulatory label by NICE in the UK, Pfizer was unable to mitigate the impact of these key decisions to US payors. The concensus amongst payors was that Exubera was not worth 5X the cost of insulin.
Pfizer and Nektar had based their value proposition on patient preference. However, this work was insufficient to convince the payors that Exubera offered value for money.
These types of decisions are bcoming increasingly common place in cash-constrained countries. This has significant implications for companies developing products - they need to be engaging and developing pricing and reimbursement strategies from Phase II onwards. It also has implications for investment analysts as they need to begin to seriously consider the impact of pricing and reimbursement decisions on forecasts.
