Published: Jan 7, 2020
Getty Images
By
JAIMY LEE
REPORTER
Eli Lilly and Novo Nordisk are separately offering help to people who are struggling to pay for their insulin, in a move that underscores how differently drugmakers are approaching the highly politicized topic of drug prices.
The Danish drugmaker NVO, -0.09% last week announced plans to provide a free immediate supply of insulin to people who may be rationing it. It is also offering patients three vials or two packs of its insulin pens for $99 and authorized generic versions of two of its branded insulin medications.
“A lot has changed,” Douglas Langa, Novo’s president, said in a Jan. 2 news release, “and we want to connect people with affordability challenges with a solution.”
Attention to how insulin medicines are priced has become a hot-button topic, standing out even in the broader national debate about how drugs are priced in the U.S.
Read: Cummings, Grassley vow to combat rising drug prices in dueling hearings
A widely cited 2016 studypublished in the medical journal JAMA found that the average list price of insulin nearly tripled between 2002 and 2013. In 2019, congressional hearings with bipartisan support to bring down insulin prices led to bills introduced in both houses that aimed to lower list prices. Meanwhile, Colorado and Illinois have capped insulin co-pays and costs, respectively, in their states.
That pressure is impacting the pharmaceutical companies including Eli Lilly LLY, +0.20%, Novo Nordisk and Sanofi SNY, -1.00% that count diabetes product revenue as major contributors to their bottom lines.
Lilly’s top-selling drugs for the first three quarters of 2019 were injectable diabetes treatment Trulicity, at $2.2 billion, and insulin Humalog, at $1.2 billion.
Insulin makes up about half of Novo’s sales, and including diabetes treatments like Victoza, that percentage jumps to 79% of total sales for the first three quarters of last year. Diabetes made up about 14% of Sanofi’s total net sales for the first nine months of the year, though diabetes sales fell 8% over this period.
Lilly announced its own set of insulin affordability options in December, saying it has capped out-of-pocket insulin costs at $95 a month for the commercially insured and that it is offering half-priced authorized generic insulin and free insulin in some cases, according to CEO David Ricks’ article on LinkedIn.
“The health care system has changed a lot over the last decade, and we’ve heard too many stories about people with diabetes who struggle to afford their insulin,” Ricks wrote. “That needs to change.”
Also last month, Paul Hudson, Sanofi’s new CEO, said that the French drugmaker would make a number of changes to its diabetes business, including halting research into future products and passing on efpeglenatide, its experimental once-weekly treatment for Type 2 diabetes. Hudson also told investors that he would restructure the company’s diabetes joint venture with Verily, Alphabet Inc.’s GOOGL, -0.01% health care arm.
“Whilst our diabetes and cardiovascular portfolio is significant, we also have to recognize that it’s declining,” Hudson said at a Dec. 10 Capital Markets Day, according to a FactSet transcript of the meeting. “Now, there are some outstanding performances in major markets in the world, but not forgetting that the pressure in the U.S. has meant some complexity around what we’re able to realize in terms of running our business.”
See also: JAMA study: The cost of brand-name prescription drugs doubles every 7 to 8 years
Drugmakers traditionally raise the prices of branded medicines at the start of each year. So far, there are no reported price increases of insulin products in 2020 from Lilly or Novo, according to Rx Savings Solutions, which markets software to inform people about prescription drug costs, and 3 Axis Advisors, a consulting firm that analyzes inefficiencies in the U.S. drug supply chain. The only increase so far is for the price of Sanofi’s Soliqua, by 4.1%, 3 Axis Advisors said.
A spokesman for Novo said he can’t disclose pricing actions “because of the confidential nature of those decisions.” A Lilly spokeswoman said the company hasn’t increased the prices of Humulin or Humalog in almost three years.
Over the last 52 weeks, Novo’s stock went up 18%, shares of Lilly gained 15%, and Sanofi’s stock jumped 19%. The SPDR S&P Biotech XBI, +0.11% exchange-traded fund has gained 25% over the last year.
By
JAIMY LEE
REPORTER
Eli Lilly and Novo Nordisk are separately offering help to people who are struggling to pay for their insulin, in a move that underscores how differently drugmakers are approaching the highly politicized topic of drug prices.
The Danish drugmaker NVO, -0.09% last week announced plans to provide a free immediate supply of insulin to people who may be rationing it. It is also offering patients three vials or two packs of its insulin pens for $99 and authorized generic versions of two of its branded insulin medications.
“A lot has changed,” Douglas Langa, Novo’s president, said in a Jan. 2 news release, “and we want to connect people with affordability challenges with a solution.”
Attention to how insulin medicines are priced has become a hot-button topic, standing out even in the broader national debate about how drugs are priced in the U.S.
Read: Cummings, Grassley vow to combat rising drug prices in dueling hearings
A widely cited 2016 studypublished in the medical journal JAMA found that the average list price of insulin nearly tripled between 2002 and 2013. In 2019, congressional hearings with bipartisan support to bring down insulin prices led to bills introduced in both houses that aimed to lower list prices. Meanwhile, Colorado and Illinois have capped insulin co-pays and costs, respectively, in their states.
That pressure is impacting the pharmaceutical companies including Eli Lilly LLY, +0.20%, Novo Nordisk and Sanofi SNY, -1.00% that count diabetes product revenue as major contributors to their bottom lines.
Lilly’s top-selling drugs for the first three quarters of 2019 were injectable diabetes treatment Trulicity, at $2.2 billion, and insulin Humalog, at $1.2 billion.
Insulin makes up about half of Novo’s sales, and including diabetes treatments like Victoza, that percentage jumps to 79% of total sales for the first three quarters of last year. Diabetes made up about 14% of Sanofi’s total net sales for the first nine months of the year, though diabetes sales fell 8% over this period.
Lilly announced its own set of insulin affordability options in December, saying it has capped out-of-pocket insulin costs at $95 a month for the commercially insured and that it is offering half-priced authorized generic insulin and free insulin in some cases, according to CEO David Ricks’ article on LinkedIn.
“The health care system has changed a lot over the last decade, and we’ve heard too many stories about people with diabetes who struggle to afford their insulin,” Ricks wrote. “That needs to change.”
Also last month, Paul Hudson, Sanofi’s new CEO, said that the French drugmaker would make a number of changes to its diabetes business, including halting research into future products and passing on efpeglenatide, its experimental once-weekly treatment for Type 2 diabetes. Hudson also told investors that he would restructure the company’s diabetes joint venture with Verily, Alphabet Inc.’s GOOGL, -0.01% health care arm.
“Whilst our diabetes and cardiovascular portfolio is significant, we also have to recognize that it’s declining,” Hudson said at a Dec. 10 Capital Markets Day, according to a FactSet transcript of the meeting. “Now, there are some outstanding performances in major markets in the world, but not forgetting that the pressure in the U.S. has meant some complexity around what we’re able to realize in terms of running our business.”
See also: JAMA study: The cost of brand-name prescription drugs doubles every 7 to 8 years
Drugmakers traditionally raise the prices of branded medicines at the start of each year. So far, there are no reported price increases of insulin products in 2020 from Lilly or Novo, according to Rx Savings Solutions, which markets software to inform people about prescription drug costs, and 3 Axis Advisors, a consulting firm that analyzes inefficiencies in the U.S. drug supply chain. The only increase so far is for the price of Sanofi’s Soliqua, by 4.1%, 3 Axis Advisors said.
A spokesman for Novo said he can’t disclose pricing actions “because of the confidential nature of those decisions.” A Lilly spokeswoman said the company hasn’t increased the prices of Humulin or Humalog in almost three years.
Over the last 52 weeks, Novo’s stock went up 18%, shares of Lilly gained 15%, and Sanofi’s stock jumped 19%. The SPDR S&P Biotech XBI, +0.11% exchange-traded fund has gained 25% over the last year.
---30---
No comments:
Post a Comment