In The Blood

The release of 2015 data by the US Centre for Medicare and Medicaid Services (CMS) provided Ord Minnett an opportunity to assess CSL Ltd’s share of this important segment of the US market.


We note that overall spending on plasma-delivered therapies by CMS, especially immunoglobulin, has grown strongly, rising 16% in 2015, although CSL has ceded some share to the second tier of fractionators. CSL has however, generally outperformed its larger rivals in the industry.


In particular, CSL has enjoyed good success in the area of hereditary angioedema (HAE) – a rare but potentially life-threatening condition characterised by acute attacks of usually non-itching edema (swelling) of the face, larynx (airway), abdomen and extremities – where CSL has doubled its share since 2011.


As expected, CSL’s share of haemophilia spending has declined as competitors launch new therapies and spending on plasma derived therapies has fallen.


CSL’s share of CMS spending (excluding inpatients) on immunoglobulins in CY15 was $516 million, which equates to around 20% of CSL’s reported immunoglobulin sales of $2.4 billion, ignoring distributor margins and rebates etc.


CSL’s share of the large Part B spending (a US Medicare plan variant that provides medical insurance as opposed to full hospitalisation cover) has declined from 37% to 35% over the five years to 2015 as the second-tier fractionators, most notably Octapharma, have gained a greater foothold.


Sales of CSL’s subcutaneous product into the smaller Part D segment (a supplemental US Medicare plan that covers prescription drugs) have lifted from 11% to 14% over the same period, boosted by the success of the group’s subcutaneous immunoglobulin, Hizentra.


We note the transition away from lyophilized immunoglobulin continues but CSL remains the largest supplier of lyophilized immunoglobulin (Carimune), accounting for circa $50 million of spending by CMS. 

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