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Spencer Osborne
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Spencer Osborne is founder of Satellite Standard Group [SSG], and a partner of Sirius Buzz (http://siriusbuzz.com/). Sirius Buzz covers the satellite radio industry as well as companies that do business in this sector. Sirius Buzz provides information and opinion to readers with an interest in... More
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  • Arena's Belviq Gets Insurance Traction 11 comments
    Jul 18, 2013 8:53 AM | about stocks: VVUS, ARNA

    In my opinion one of the biggest issues surrounding the prescription anti-obesity space is insurance coverage. At this point Arena's (NASDAQ:ARNA) Belviq and Vivus' (NASDAQ:VVUS) Qsymia have about 30% to 35% insurance participation with most that are covering carrying these drugs at high level tiers.

    In order to combat the lack of insurance coverage both companies have initiated rebate programs to help offset consumer costs. More insurance coverage leads to more willingness by consumers to try these products. When more consumers embrace prescription anti-obesity medications sales increase. Increased sales then translate to a healthier bottom line. Essentially the greater the insurance coverage, the better the stock prices will be.

    This week Arena's Belviq got some positive news on the insurance front by getting coverage on the Tricare formulary as well as some Blue Cross Blue Shield plans. This follows an announcement last week from Vivus detailing better coverage with Express Scripts and Medco.

    The Tricare formulary covers employees of the Department of Defense and their families. Several million people are included in the plan, so this is an important step. While it would be tempting to think that other government insurance programs will follow suit in short order, let's take this a step at a time. Currently Belviq is the only anti-obesity drug covered in the Tricare system.

    (click to enlarge)Tricare Coverage Chart

    One thing that I have oft stated is that it is important for investors to watch the sector as a whole. When Vivus makes progress on insurance with Qsymia it will likely benefit Belviq in conjunction. The same is the case when Belviq gets insurance news. If you are invested in the sector it matters not which company makes positive traction with insurance. What matters is that we see traction.

    Arena partner Eisai is responsible for reaching out to the insurance industry. Eisai has indicated that it is targeting 40% coverage by the end of this year, and 50% or more by the end of next. Landing Tricare is a testament to having a big partner with the manpower to handle getting insurance in bigger swaths rather than dribs and drabs.

    What investors want to watch for is any news regarding insurance. These positive events seem to go under the radar much more than they should.

    Disclosure: I am long ARNA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

    Additional disclosure: I have no position in Vivus

    Themes: long-ideas Stocks: VVUS, ARNA
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Comments (11)
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  • healthythoughts
    , contributor
    Comments (2850) | Send Message
     
    Insurance coverage is very important...That's great news!
    18 Jul 2013, 03:27 PM Reply Like
  • Spencer Osborne
    , contributor
    Comments (6855) | Send Message
     
    Author’s reply » Tried to publish this as a standard article but got the run around on links to a PR. Arena did not issue a PR. Thus, there is no way to show that this news is new news. I was on the road, so I simply published as an instablog. Those that follow me will get the news.
    18 Jul 2013, 03:36 PM Reply Like
  • healthythoughts
    , contributor
    Comments (2850) | Send Message
     
    Tricare is a big deal!
    18 Jul 2013, 04:45 PM Reply Like
  • Spencer Osborne
    , contributor
    Comments (6855) | Send Message
     
    Author’s reply » Interesting Update....

     

    Belviq no longer appears on the formulary.

     

    Will monitor and update
    18 Jul 2013, 10:32 PM Reply Like
  • healthythoughts
    , contributor
    Comments (2850) | Send Message
     
    Thought you may find this on Twitterverse folks being mean from NY times Joe Nocera....

     

    http://nyti.ms/16NWvgc
    19 Jul 2013, 07:45 AM Reply Like
  • jakes101
    , contributor
    Comments (544) | Send Message
     
    Wow, this is like a new dimension for me, thanks healthythoughts for the reminder to check this out!

     

    Spencer,

     

    This is good news. Now dealing with the large state of CA only. A nice chunk of the lower income on Medi-Cal (Medicaid for us Californians) here are obese. This is a large market for us.
    This is a step by step process as to what happened here in CA to someone on Medicaid who went to the family doc trying to get on Belviq:

     

    1. Patient printed the free Belviq 15 day sample and took it in to the Dr. to get a prescription for 2 weeks to cover the sample and a separate one for a 1 month supply

     

    2. The Dr. had not heard of the drug, and mentioned to try phentermine. It seemed the Dr. most likely had not heard of qsymia, but that is an assumption.

     

    3. The patient asked the Dr. around 4 times that they just want to try the sample and the Dr. finally wrote a script. It was hard, because the Dr. did not like to write a script for a drug they don't really know what is in it. But it worked.

     

    4. Patient asks for another script for the 1 month and was informed that it will not be covered by Medicaid. No script was written.

     

    5. The Dr. did inform the patient that after the sample come back in and go on generic phentermine. The reason is, this generic drug is covered. If phentermine shows no results in x amount of time then there is a way to get Belviq covered if it is beneficial to the overall health...like blood pressure, diabetes numbers also improving. For this reason it is important to at least try Belviq for 2 weeks and eat healthier and walk 30 min or so to see if the full potential of the drug is reached. Perhaps you are feeling fuller etc. The Dr. then can fill out a medical necessity form and submits it to the state, and yes it will cover it. For now this is the only way that I know of that Medicaid in CA will pay for it, but you have to try the cheap generic phentermine first it seems.

     

    6. Patient then went to CVS to fill the sample and they had none, and had to special order it. It arrived the next day! The pharmacist looked at the free sample and immediately recognized and had heard of this new drug Belviq. The process went very smooth at cvs.

     

    So there you have it, in the same town, a busy family Dr. had never even heard of it, and therefore very hesitant on writing the script. The pharmacist at cvs 5 min down the street, knew exactly what the drug was. With more time, the word will spread, the Dr. will write, and hopefully the insurance will cover!
    
    19 Jul 2013, 09:12 PM Reply Like
  • healthythoughts
    , contributor
    Comments (2850) | Send Message
     
    You're welcome jakes
    19 Jul 2013, 09:25 PM Reply Like
  • tgallo
    , contributor
    Comments (133) | Send Message
     
    excellent article.
    22 Jul 2013, 12:47 PM Reply Like
  • BUNKY
    , contributor
    Comments (27) | Send Message
     
    Spencer how much ARNA stock do you own. if you own less than a 1000 shares then I believe the theme of your being long the stock may not be sincere..I'm taking a screen shot of this comment to send to Seeking Alpha management , so when you take it down they will reinstate it as they are truth seekers and want a true view of the stock being discussed here. thank you in advance ...Bunky
    26 Nov 2013, 10:58 PM Reply Like
  • Spencer Osborne
    , contributor
    Comments (6855) | Send Message
     
    Author’s reply » Bunky....

     

    Your comment is not relevant. I have disclosed that I am long, and I am. I have disclosed that Arena makes up about 5% of my portfolio. The number of shares I own is not really material, as you have no idea as to the other items in my finances to weigh it against.

     

    27 Nov 2013, 09:02 AM Reply Like
  • healthythoughts
    , contributor
    Comments (2850) | Send Message
     
    Wow, here we go again...Nice honeymoon, followed by the doubters of all things... At least you had a nice rest for awhile
    27 Nov 2013, 09:27 AM Reply Like
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