March 25 (Reuters) - Investors in Sprout Pharmaceuticals, which makes the first drug to treat low sexual desire in women and was bought by Valeant Pharmaceuticals International Inc last year, say the drug has been priced too high, Bloomberg reported on Friday.
By overcharging for the drug and neglecting to market it, Valeant has undercut the commercial success of the drug, called Addyi, Bloomberg reported, citing a letter from Sprout shareholders.(bloom.bg/1obsjv5)
Valeant priced Addyi at $800 a month even though Sprout had established a price point of about $400 a month based on market research, the investor group wrote in the letter sent to Valeant on March 14, according to Bloomberg.
The group represented all of Sprout shareholders at the time of its sale to the Canadian drug company for $1 billion in August.
Addyi, whose chemical name is flibanserin, is designed for premenopausal women whose lack of sexual desire causes distress. The condition is formally known as hypoactive sexual desire disorder, or HSDD. The drug needs to be taken daily.
Addyi has been nicknamed the "female Viagra" even though it does not work like Pfizer Inc's blockbuster Viagra pill for men that in 1998 became the first approved drug for erectile dysfunction.
Due to the higher price point, insurance companies refused to cover the drug, helping to make it unaffordable for millions of women, the investors group said.
The investors requested materials showing that Valeant can fulfill its obligations under the merger agreement going forward, Bloomberg reported. They are seeking evidence that Valeant plans to spend $200 million for marketing and research and development for 2016 and half of 2017, as part of the agreement, it added, citing the letter.
The group also seeks assurance that Valeant will keep a sales force of 150 to distribute Addyi.
In response, Valeant said it was continuing to work closely with pharmacists, healthcare providers, and patients to educate them about the drug.
"Valeant intends to comply with all of its obligations under our agreement with the former shareholders of Sprout, including, as they relate to marketing spend, number of sales reps, and post-marketing studies," said Laurie Little, a Valeant spokeswoman.
Reporting by Arathy S Nair in Bengaluru; Editing by Tom Brown