Sanofi's Weight-Loss Drug May Be Victim of German Health Cuts

Sanofi AventisBloomberg - Sanofi-Aventis SA's new diet pill, Acomplia, may get limited sales in Germany because the treatment is being targeted by a national plan to trim health-care spending.

A German panel of doctors and insurers earlier this month recommended the government classify Acomplia as a ``lifestyle'' drug, not one that is necessary for treating a disease. The proposal, if carried out, means the medicine's 100-euro ($127.40) a month cost won't be reimbursed covered by state health insurance plans, and will probably inhibit sales.

The recommendation is part of Germany's strategy to reduce medical expenses, echoing a new round of health-spending cutbacks in several European countries. Rejecting coverage for new and expensive medicines would threaten several drugmakers, such as New York-based Pfizer Inc. and Sanofi, France's largest pharmaceutical company. Some doctors say that taking aim at Acomplia is short-sighted because obesity is becoming a pandemic.

 "From a pure medical point of view, this is very sad," said Sven Diederich, 43, an endocrinologist with no ties to Sanofi who treats more than 13,000 overweight and diabetic patients a year with his six colleagues. "It's a real innovation."

Diederich, a Berlin doctor, prescribed Acomplia to 25 obese patients and the state health insurer is paying, for now. Diederich says Acomplia is the "best medicine" he's tried for those whose weight increases the risk of heart attacks and diabetes. Although all the patients lost weight, some may stop taking the drug if the new rule takes effect, Diederich said.

Growth Targets

The medicine is important to growth at Paris-based Sanofi, which predicts Acomplia may bring in $3 billion a year. The government has two months to consider the proposal of the panel, which has wide-ranging regulatory powers. Health department support for the recommendation would hamper Sanofi's ability to generate the 150 million euros analysts estimate in revenue from the drug this year.

Sanofi yesterday reported a 12 percent drop in third-quarter profit after losing sales to a generic version of the blood- thinner Plavix. The drugmaker is eliminating jobs in France and Germany as a consequence of the government health-policy changes.

Food and Drug Administration approval of Acomplia may be delayed until 2007 after the company didn't confirm its goal to introduce the product in the U.S. this year. The FDA asked for more information in February, and Sanofi submitted a complete response Oct. 26.

Sanofi shares fell 1.9 percent, to 66.60 euros in Paris yesterday. The stock has declined 12 percent this year, making it the worst performer in the 15-member Bloomberg Europe Pharmaceutical Index, which has risen 3.8 percent.

Cost-Benefit Analysis

European governments, which fund their citizens' health care, are comparing the expense and benefits of drugs as a way to slow increases in spending. The moves mimic cost-saving techniques used by U.S. insurers, which pay for some drugs and not others based on cost-benefit analyses.

Health-spending eats up around 230 billion euros, or about 11 percent of annual German gross domestic product, according to the Federal Statistics Office in Wiesbaden. That compares with around 6 percent in the U.K. and 16 percent in the U.S. German Health Minister Ulla Schmidt estimates that 20 billion euros are wasted each year on unnecessary treatments and misspending.

The cost of medicines is Germany's second-biggest public health expense after hospital spending, and has swelled more than 50 percent over the past decade to 25 billion euros annually, the Organization for Economic Cooperation and Development said.

The U.K.'s National Institute for Health and Clinical Excellence, or NICE, next year will consider whether Britain will pay for Acomplia. The panel advises the government on the cost- effectiveness of treatments and influences what doctors prescribe and what local health authorities fund.

U.K. Decisions

Earlier this month, NICE rejected the use of Eisai Co.'s Aricept, Johnson & Johnson's Razadyne and Novartis AG's Exelon for mild Alzheimer's disease because they don't offer sufficient added benefit over cheaper drugs. In Germany, insurers won't pay for Pfizer's inhalable insulin Exubera, which costs four times as much as standard insulin.

Acomplia is the first diet drug to damp food cravings by blocking signals in the brain. Scientists who studied the pill said patients showed improvements in blood-sugar levels and fat content that went beyond those attributable to weight loss. Lower blood-sugar and fat may help prevent diabetes, a disease that can lead to amputations, blindness and death.

Diabetes

The European Medicines Agency, the main drug regulator for the European Union, approved Acomplia in June as a weight-loss aid for patients with a body mass index, or BMI, of 30 or more, or for patients with a BMI of more than 27 who are at risk of weight-related illnesses such as diabetes and heart disease. BMI is a tool for measuring body fat, and is calculated by dividing body weight by the squre of a person's height. So a person who's 165 centimeters tall (65 inches) and who weights 68 kilos (150 pounds) would have a BMI of 24.98.

The World Health Organization defines obesity as BMI of 30 or over, or up to a third of Europe's adult population. A person with a BMI between 25 and 29.9 is defined as overweight.

After the European agency backed Acomplia for people with a BMI of more than 27, the German Joint Federal Committee had little choice but to label the drug a "lifestyle" treatment. The cost of treating everyone that potentially falls into that category would cripple Germany's health system, Diederich says.

"That would have led to an enormous cost explosion," he said. "From an economic point of view, the decision was the right one. I would have acted the same."

Reimbursement

If regulators had chosen a BMI of 35 or over, it would reduce the pool of eligible patients and increase the likelihood of reimbursement, Diederich said. Sanofi is fighting the decision.

Hanspeter Spek, who runs Sanofi's drug operations, said Acomplia has a better chance of winning reimbursement in France than in Germany because the company can negotiate for partial coverage in its home market.

"Obesity will be one of the major public-health challenges in years to come," Alexander Mann, an endocrinologist in Frankfurt, said in a telephone interview. "A wave of diabetes is about to engulf us, an obesity tide is already there. This is something we have to stand up and recognize."

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