GENENTECH/PCS HUMAN GROWTH HORMONE MANAGED CARE DISTRIBUTION SYSTEM

GENENTECH/PCS HUMAN GROWTH HORMONE MANAGED CARE DISTRIBUTION SYSTEM "should be operational later this year," Genentech said April 4. The agreement will allow PCS Health Systems to handle claims for Genentech's two human growth hormone products (Nutropin and Protropin) through its RECAP pharmacy computer network. PCS will receive a fee from Genentech on a per claim basis, PCS said.

The PCS system will allow Genentech "to both monitor and manage access" to the hGH products so it can "continue to limit their availability to those patients who have legitimate medical need for them," Genentech said.

PCS will provide an alternate channel of distribution for the growth hormone products. Caremark currently handles about 75% of the distribution of hGH through its home infusion network. Genentech monitors patients receiving the drug as part of its National Cooperative Growth Study, both as a means to prevent abuse and to track long-term outcomes. Genentech's agreement with Caremark will remain in place. Genentech did about $119 mil. in business with Caremark in 1993.

PCS' Professional Services Network will handle the distribution. PCS plans to make the product available through its recently established home infusion network and managed-mail service operation. The McKesson subsidiary also handles distribution of Berlex' multiple sclerosis product Betaseron.

The growth hormone distribution system will not involve selling the product directly to patients as is the case with Betaseron. Instead, it will allow plans to handle claims for the Genentech products in the same manner as most outpatient drugs, with patients providing coverage cards to the pharmacist who can then access coverage information. Human growth hormone and other highly expensive drugs are generally handled through major medical coverage rather than a pharmacy benefit, PCS pointed out.

The exclusive PCS agreement also provides Genentech with a hedge against increased competition from other growth hormone products. Genentech Chief Financial Officer Louis Lavigne told a Kidder, Peabody healthcare conference in New York City April 6 that Protropin continues to maintain a 70% market share. The two growth hormone products combined for sales of about $55 mil. in the first quarter, he said.

With the expiration of Lilly's orphan drug exclusivity for Humatrope, however, Genentech is bracing for competition from up to four new companies. "We have reduced our annual expectation for growth hormone sales for 1994 to $185 mil.," Lavigne reported. Protropin sales were $216 mil. in 1993.