As indicated a few weeks ago, we like to try something different on this evolving site. And so once again, we are presenting what amounts to a guest column. Why? We like the idea of livening up the usual menu of items with input from a loyal reader, but also one who has experience in the trenches and a refreshing point of view. This piece offers some interesting predictions about Vytorin prescription trends, for instance. Will we do this again? Probably. We do not wish to be flooded with requests, but we are open to suggestion. Meanwhile, we hope you enjoy this little contribution…

Vytorin Prescribing Decline Continues, And May Be Understated

By Alan Braverman, general managing director at ImpactRx, a market research firm that tracks prescription drug trends. He heads the firm’s Wall Street business.

Many on Wall Street are discussing the fact that Vytorin’s market share fell by somewhere around 2 or 3 share points in what we call NRx. This is bad news for Merck and Schering-Plough, and their stock prices have suffered. A review of more sensitive and leading indicators of prescription writing behavior says the story may be worse than Wall Street anticipates.

Let’s look at how to measure changes in prescribing behavior. NRx includes four key components - prescriptions for newly diagnosed patients, patients switched from another med and patients adding the pill to an existing therapy, plus renewals of existing prescriptions. The issue is that NRx doesn’t differentiate between the two very different patients sets. Renewals can be more than 90 percent of NRx in chronic care situations, which is approximately the case with statins. NRx, therefore, isn’t very sensitive in periods of volatile market share shifts, like the environment for Vytorin today. The composition of NRx thus masks the real impact of an event like the Enhance study on physician prescribing.

By contrast, NWRx is a metric that measures only the new prescribing decisions and, therefore, more accurately measures the change in writing behavior, also referred to as the “dynamic portion” of the market. And so this is both a leading indicator of future NRx and is a more sensitive indicator of real changes in prescription writing behavior as they occur. NWRx is also more sensitive to what’s happening in the physician’s office and the decisions they are making at the current time.

So what is NWRx share telling us about Vytorin? The NWRx share paints a more realistic picture than NRx in the market for current Vytorin scrips. The chart shows that while NRx may have fallen 3 share points, NWRx has fallen 8.6 share points, or more than 60 percent* of the dynamic portion of the market since the release of Enhance study results.

And what does NWRx say about future NRx? Well, the NWRx has been a good leading indicator of future NRx. That’s because NWRx only measures new scrip decisions and because much is known about the behavior and predictability of renewals. All else being equal, NRx tends to follow NWRx. And the data suggests Vytorin NRx has more to fall (see the chart showing weekly data).

Moreover, since the dynamic portion of the market is small, NRx tends to change slowly to catch up to NWRx - those new prescribing decisions. But that didn’t happen here, it’s been changing rapidly, which also suggests future NRx should fall further.

Wall Street revenue estimates are based upon future prescription expectations. Current NWRx data on prescription writing appears to be lower than what many on Wall Street expect. So if this trend continues, Vytorin revenue could end up below Wall Street expectations which is why the current Vytorin prescribing free fall is bad, and may be understated. Investors should take note.

Of course, new information changes everything and this analysis assumes the status quo. Material news can change behavior again. There could be more news at the American College of Cardiology meeting in March, if not sooner. There could be more newspaper advertising. And the drugmakers could promote more heavily to doctors; already, there’s been a ramp up - Vytorin’s share of a doctor’s time went from 28 percent before the Enhance study was released to 39 percent afterwards.

That said, based upon the more sensitive NWRx metric and in the absence of the unknown, current prescribing behavior appears to have shifted far more than what Wall Street currently believes.

* Based upon NWRx data from ImpactRx Inc., using its Primary Care Physician data, using 7 day rolling NWRx data.