After Eli Lilly announced it would take measures to cap insulin prices, Novo Nordisk will reportedly follow suit. There may be strategic reasoning behind these moves.
A Novo Nordisk flag flies in the wind/Courtesy joreks/Shutterstock
As the world begins to adjust to a post-pandemic era, drug affordability has become a hot topic for many patients across the U.S., especially as inflation and medical necessity take hold.
After Eli Lilly announced it would take measures to cap insulin prices on March 1, Novo Nordisk is now following suit. Given what is known about the changes in diabetes management, there may be strategic reasoning behind these moves.
When insulin was first discovered in 1921, Canadian scientists sold the patent for $1. Within a decade or two, companies such as Eli Lilly and Novo Nordisk began mass production and developing insulin analogs respectively to prepare for mass distribution, reduce allergic reactions and prolong insulin activity within the body.
Although both companies have pioneered new diabetes treatments, the financial costs associated with these drugs have not been without controversy. While both Lilly and Novo Nordisk have implemented programs to lower patient burden, the U.S. government found it necessary to intervene.
And with entities like the state of California planning to self-manufacture insulin, the market supply is bound to increase among more distributors, leading to meager profits on traditional insulin and insulin analogs alone.
Finally, Novo Nordisk recently carried out Phase III trials on its once-weekly insulin icodec, which would reduce the frequency of insulin injections needed to combat high blood sugar levels. With these market conditions in mind, the business case for lowering insulin prices has improved.
Novo Nordisk’s backup plan seems to be strategically oriented toward researching and developing superior forms of insulin such as insulin icodec. Novo also intends to combine insulin icodec with semaglutide to control the basal insulin market by the first half of 2024.
Lilly’s backup plan also involves researching and developing once-weekly insulin. Known as basal insulin Fc, this formulation is also currently in Phase III trials and utilizes a long-acting IgG Fc-fusion protein.
By focusing efforts on new products to be unveiled within the year, both Lilly and Novo Nordisk intend to prove that the future of diabetes is here. Since once-weekly insulin would have to be marketed as a brand product, both companies stand to gain from market exclusivity on the newer insulin formulations.
While government regulators may have scored a victory by enabling access to regular insulin, this win does not guarantee access to once-weekly insulin formulations for all. This caveat will be important as the world moves forward with increasing patient accessibility to affordable drugs, both domestically and internationally.
