Will a Better Drug Sell Better?

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For drugmakers, strong efficacy and safety data are often not enough to get their product sold. Sometimes it comes down to whether the drug is cost-effective.

Johnson & Johnson's (NYSE: JNJ) anti-inflammatory Remicade, which is marketed outside the U.S. by Schering-Plough (NYSE: SGP), is a great example. Johnson & Johnson ran a head-to-head trial against azathioprine, one of its main Crohn's disease competitors, but the results may not change its usage much.

The data is pretty solid in that there's a statistically significant difference between outcomes. Patients getting a combination treatment went into remission 57% of the time compared to just 44% of patients receiving Remicade alone and 31% of patients getting azathioprine alone.

The problem is that azathioprine is much less expensive than Remicade. Doctors may be willing to roll the dice and hope their patient comes up in the 31% that responded to azathioprine alone before putting patients on the more costly regimen.

While the price may not change Remicade's place in line, the fact that Remicade has been tested in combination with azathioprine may give Remicade an edge over other biologics such as Abbott Labs' (NYSE: ABT) Humira and Elan (NYSE: ELN) and Biogen Idec's (Nasdaq: BIIB) Tysabri.

This may be one of the instances where sales reps earn their keep. How well the reps spin the data will likely determine how much of a bump Johnson & Johnson gets to its $3.3 billon franchise. Keep in mind though that much of the sales of Remicade come from treating rheumatoid arthritis. Either way, this isn't going to be a game-changer for Johnson & Johnson. And with the company as large as it is, it takes a lot to change its revenue.

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