As covered in a story from Venture Beat and from their own press release, Cogentus Pharmaceuticals of Menlo Park, CA just received $62.5 million in third round funding for their combination drug of clopidogrel (an anti-platelet) and omeprazole (a proton pump inhibitor). The idea behind this combination is omeprazole will help with the gastro-intestinal side effects of clopidogrel, a “blood thinner.” Both of these drugs have recently gone off patent and can be reproduced cheaply.

Convention would suggest that a doctor would not prescribe a combo-drug when two generics are cheaper for the patient. However, the market proves otherwise. On the list of top 200 drugs prescribed, we find many combo-drugs such as Advair Diskus, Vytorin, Symbyax, etc. Combo drugs are convenient for patients, and if a company could get the doctor to be aware of their drug, they’ll probably prescribe it because taking one drug vastly improves a patient’s compliance to drug therapy as compared to taking two drugs. Unfortunately, there’s a large hurdle for Cogentus, and that is the third party payers.

The successful combination drugs on the market all contain one common characteristic – at least one of the drugs in the combo is still under patent and buying them in a combination form would save money for a patient/third party payer compared to buying the two drugs separately. If the third party payer does not put Cogentus’ drug onto their formulary, it may be written, but it’s not going to be dispensed. Making a drug attractive to a patient and prescriber is not good enough, Cogentus needs to make a drug attractive to the third party payer. If I was Congentus, I’d try to obtain really good pharmaco-economic models on how the drug would be saving money.

There is yet one last hurdle for Cogentus’ combination drug and that is other generic companies. The generic manufacturer is on a crowded list of companies who function on slim margins. If Cogentus is successful with their venture, what is to prevent a company like Teva from coming along and copying it?