Founding Year: 1997
Office Location: 2-1250 Waverley Street, Winnipeg, Manitoba, Canada R3T 6C6
Website: www.medicure.com
Inception Of Medicure: Getting Off the Grounds
Following the development of WinRho, one of Canada’s first successful biotech products, Dr. Albert Friesen launched Medicure on September 15, 1997, as a Winnipeg-based biotech company focused on developing cardiovascular drugs.
The goal of the company was to bring its first product, MC-1 from concept to FDA approval. From the start of development in 1997 through 2008, Medicure raised $140 million and drove the development of MC-1 from an idea, through pre-clinical studies, Phase 1’s, several Phase 2’s, and then to the pivotal Phase 3 clinical trials seeking FDA approval for a very large unmet market: protection against ischemic reperfusion injury in cardiovascular patients undergoing bypass surgery.
However, based on elements of the study design, the pivotal Phase 3 trial of MC-1 did not achieve its primary endpoint. These were challenging times for Medicure, but the company was able to survive through 2008 when there was only sufficient cash to carry on the existing business for about 6 months.
During this transition period, the team pivoted to focus on marketingAggrastat (tirofiban hydrochloride) injection: a Merck-developed product acquired in 2006. Despite the odds against them, they grew Aggrastat sales from 2% of the US glycoprotein iib/iiia (GP2b/3a) inhibitor market to over 65%.
Buoyed by the success of Aggrastat, in 2017, Medicure made the strategic acquisition of Apicore Pharmaceuticals LLC and later divested the company for a sale of $140 million and significant profit. Medicure then returned $26 million dollars in profits from this sale to investors.
In 2017, Medicure expanded its portfolio into the primary care market and began marketing Zypitamag (pitavastatin) tablets, a next-generation statin. This was a pharmaceutical alternative to a branded competitor with an established market share.
Medicure ran into several roadblocks as a company trying to get this medication covered by insurance companies and the associated pharmacy benefit managers (PBMs).
“There were times we offered remarkably high rebates of 75–80% of the listed price but we were still rejected (by PBMs). They said that while the net price was on par with generic statin pricing, the reason they (were denying) coverage was that it would ‘hurt their quality metrics.” – said Dr. Neil Owens, President, and COO of Medicure.
Tired of the PBM run-around and motivated to get Zypitamag to patients who could most benefit from its use, Medicure decided to bypass the PBMs and sell directly to US consumers. So, the company made a deal to purchaseMarley Drug, an independent pharmacy licensed to dispense medication across the US.
On December 16, 2020, Medicure began selling directly through Marley Drug, making it one of the first manufacturers to use this game-changing model. They now offer this branded product, Zypitamag, at a cash price of just $1.15/day. This is 90% less than any other branded product available through insurance and is just as profitable to Medicure. Medicure also offers approximately 1,000 other FDA-approved medications through its pharmacy and E-commerce platform.
Medicure continues to engage in research and has started another Phase 3 clinical trial with the same molecule it had started developing in 1997: MC-1, this time for a rare pediatric disease that causes seizures in children and is fatal if untreated. [MC-1 is being tested to treat pyridox(am)ine 5′-phosphate oxidase (“PNPO”) deficiency. PNPO deficiency is an inborn error of vitamin B6 metabolism, which causes an epileptic encephalopathy responsive to pyridoxal-5-phosphate (PLP).] This study is scheduled to begin in early 2023. Gaining approval could be a game-changer for the company, as Medicure received orphan drugs and rare pediatric disease designations from the US Food and Drug Administration for MC-1 for the treatment of PNPO deficiency. The approval makes Medicure eligible to be awarded a priority review voucher, which typically sells for USD $100-200 million, which can help accelerate Medicure’s growth in its next chapter.
Excerpt from The Chief Digest’s interaction with Medicure
What role do changing policies, mounting expenses, and margin pressures play in affecting the state of the pharmaceutical industry?
Generally, lower margins impact the number of competitors entering a particular therapeutic space or manufacturing arena. Let’s take for example the generic drug arena, where lower margins may lead to drug shortages, which is a chronic concern. Often several manufacturers enter the generic drug arena when a drug goes off patent but as margins fall, the manufacturers often face pressure to divert resources to another drug that will be more profitable and cease production. This leads to shortages that may take a very long time to correct itself, if at all. Many of these shortages could also create disparities in competition whereby a generic drug, which in theory should be less expensive, may be more expensive or face no price erosion due to few competitors manufacturing the product. Generally, there is no impact on quality from lower margins as there are stringent regulations and critical oversight that must be met to enter the market. However, it forces more manufacturing and development offshore to countries with lower production costs thus impacting the national drug manufacturing economy.
Some legislations we are closely monitoring relate to understanding provisions and implications surrounding the Inflation Reduction Act, drug importation from Canada, changes to the 340b program, and rules surrounding how PBMs can operate and the role they play in drug pricing and access.
What are your offerings and capabilities to the public? How do you ensure high standards of operational productivity and efficiency?
We offer medication within the in-hospital setting, with Aggrastat and sodium nitroprusside, and in the primary care space, with Zypitamag. To ensure operational productivity and efficiency, we set important metrics that align with Medicure goals.
Our in-hospital drugs, which are acute care injectables, are complex molecules with critical and nuanced manufacturing steps. We have detailed oversight into all aspects of the manufacturing process and are in frequent communication with our partners to ensure a constant supply. We also carry out vigilant monitoring of our supplies and the markets we operate in to ensure enough supply to meet demand. Once our products are manufactured and available for purchase, we then ensure there is access to them through the various supply chain intermediaries, like national wholesalers. So, this too takes another level of oversight to ensure that all stakeholders in the supply chain are adequately supplied and that no hospital ever experiences a stock-out or waits for a long time to receive our products. A similar operational oversight and metrics level is employed for our primary care drug, although the manufacturing process is not as complex. Overall, we employ a watchful eye not only on the manufacturing process but also on the market forces that may impinge on the supply chain.
With our Direct-to-Patient pharmacy e-commerce platform, we offer all FDA-approved medication and approximately 1,000 of these medications are offered at a very cost-effective price which enables access by all Americans. Most of these medications are among the most prescribed medications in the country. Towards operational productivity and efficiency with our national pharmacy, we employ patient-focused metrics. In this case, we are affording access to medication we don’t manufacture but are providing access to. Therefore, sourcing these products at an acquisition cost where we can pass on the savings to our clients is a primary metric for us. We work with many partners to acquire the lowest acquisition cost while not compromising safety. We are also constantly surveying e-commerce competitors in several sectors with an eye toward improving efficiencies in ordering and customer service so that the overall process meets and exceeds industry standards. Finally, delivering medication to patients in a timely manner across the country is also another important metric we monitor and improve upon when necessary.
Do you feel there is fierce competition in the pharmaceutical space? How would you highlight your company’s competitive advantages?
The pharmaceutical space is very competitive, both in the innovation of new products and in the generic space. Medicure has been successful by focusing on our value proposition to physicians, pharmacists, and patients. We find that beyond a fleeting transactional experience, our stakeholders want information and support. We have always focused on robust clinical evidence and data in our conversations, as well as how we can save hospitals and patients money, which has been a successful combination for us.
In your opinion, what do you think are the key challenges in the pharma sector? Is there a possible solution to that?
When it comes to promoting branded FDA-approved products in the US a key challenge right now is patient access. Companies are going to have to get smarter and become more creative to develop solutions for patients to access these life-saving medications.
Post the COVID-19 pandemic, how has your business changed?
The pharmaceutical industry has really relied on in-person communication with healthcare providers over the past few decades. The COVID-19 pandemic definitely changed that, and we’re seeing more and more healthcare providers willing to meet with us virtually to learn about our products. This is a real advantage for us, especially as a smaller pharmaceutical company. We can spend less time traveling to meet with healthcare providers and more time talking with them, but virtually.
We’ve also seen a large increase in the willingness of healthcare providers to learn online, particularly through social media. We’ve adapted our marketing strategies to make sure we are getting in front of healthcare providers as their habits have changed.
Another key parameter to consider from the COVID-19 pandemic is budgetary constraints. With both Aggrastat and Zypitamag, we’ve had a real advantage – we’ve been able to sell both products to healthcare providers as not only a clinical benefit to their practice but also as a financial benefit. With Aggrastat, those cost savings applied to hospitals, and for Zypitamag, those cost savings applied to patients, in that they were paying 90% less for branded pitavastatin, and to clinics, in that they were spending way less administrative time fighting with insurance companies to get a branded product approved.
Could you shed some light on upcoming products and patents, if you have any? Which products are the key highlights of your company?
We are very excited about three exciting avenues for us right now – Zypitamag (pitavastatin) tablets, Marley Drug, and MC-1.
Zypitamag (pitavastatin): We have this great product that we believe can help a lot of people, but this molecule, pitavastatin, has never been accessible to Americans because of the outrageous costs. We feel that with our Direct-to-Patient model, selling Zypitamag through a manufacturer-owned pharmacy is game-changing. The best part is that this model is just as profitable for us as the traditional PBM route. The only difference is patients are paying 90% less for the medication, prescriptions are never abandoned due to cost, and there is always product availability. It’s a win-win for patients and there’s an added benefit for providers in that they don’t have to fight with insurance anymore and go through step-therapies or prior authorizations which is a huge administrative burden for healthcare providers right now.
Second, Marley Drug. Marley Drug is a nationwide pharmacy with huge potential. We are selling medication at affordable cost in all 50 states. We use a very fair pricing model. We price our medications based on what it costs us to buy them. It’s that simple. We buy medications from wholesalers, cut out the PBM middlemen, and pass on those savings directly to patients. There is a growing understanding in the U.S. that forging insurance and paying cash for your medications is actually a better deal and Marley Drug is a great resource for patients to get access to these medications, regardless of where they live. We also offer longer fills than other pharmacies, up to 12 months, which can save patients a lot of money, and there is data to suggest it also is better for patient compliance and adherence.
Lastly, we’re really excited about MC-1. This product was what started Medicure, and while the original indication failed its Phase 3 trial, we’re so excited to be launching a new Phase 3 trial for a rare pediatric condition called PNPO deficiency. Many families out there can really benefit from that, as there is an unmet need for pharmaceutical-grade vitamin therapy for this condition. In addition, orphan drugs and rare pediatric disease designations from the FDA enable Medicure to be eligible for a priority review voucher, which typically sells for USD $100-200 million.
How do you see the company changing over the next few years, and how do you see yourself creating that change?
The world is moving online. We expect a boom in the online pharmacy industry, and we believe our E-Commerce pharmacy, Marley Drug will be a key part of that. We’re currently working on improving the workflow so our customers can have a smooth and trustworthy experience online when it comes to ordering their medications.
With the success we have seen with Zypitamag, we are also hoping to find similar products that could really benefit from a Direct-to-Patient model. Whether it be through a partnership, or purchasing a product, we see real value in this model as a way to propel product growth.
The Founder’s Desk
Meet Dr. Albert Friesen
Dr. Albert D. Friesen is the founder and has served as CEO and Board Chair of Medicure Inc. since 1997. He is also a founder and serves as President of Genesys Venture Inc. (GVI). Dr. Friesen has been instrumental in the founding and development of several health industry companies, including DiaMedica Inc. and ABI Biotechnology (which became Apotex Fermentation and now Cronos Fermentation), Canada’s first profitable biotech company, and the Winnipeg Rh Institute, where he led the development of Canada’s first biotech product, WinRho. Dr. Friesen has also played a key role in a number of regional and national organizations, including as a founder and first Board of Director Chair of the Industrial Biotechnology Association of Canada (now BIOTECanada). Dr. Friesen received his Ph.D. in protein chemistry from the University of Manitoba.
“Our vision is to become a leading pharmaceutical company within the U.S., offering a growing portfolio of products that improve patients’ lives.”