Pharma and Medtech CEOs at JPMorgan 2020 Weigh in on Insulin Pricing, Supply Issues, and Innovation

Executives of the Big Three pharma companies involved in diabetes research, development, and manufacturing — Eli Lilly and Co., Novo Nordisk, and Sanofi — spoke publicly this week at JPMorgan’s 2020 Healthcare conference on issues related to insulin pricing and supply. 2019 proved to be a dramatic year for many of these firms, with Sanofi announcing its exit from diabetes research and development and all three firms facing scrutiny over the rising price of insulin

“We’ve worked ourselves into a spot that is difficult to get out of,” said Lilly CEO David Ricks, as reported by Kelly Close’s Close Concerns diabetes newsletter. “We’ve built insurance designs that make insurance more affordable for more people but have less benefit for those that are sick … In the meantime, what we need to do as manufacturers is work on our own solutions in the short term. What can we do to plug the holes where people find themselves in difficult circumstances? Where their deductibles or copays are very high, can we help?”

Insulin pricing has become a central point of discussion for both public and private policy. Numerous organizations are now lobbying for affordable insulin, state governments have legislated certain price controls or emergency access provisions, and companies such as Lilly have introduced cheaper alternatives to their mainline insulin products. Activist hashtags such as #insulin4all have even made it into the campaigns and stump speeches of leading presidential candidates.

There’s no question that the leadership teams at the Big Three are aware of this. Man are seeking a path that addresses the public health crisis and pressures on them, while also maintaining the profitability of these critical medications.

The dynamic is complicated by the complexities of the U.S. healthcare system, where the competing and collaborating interests of manufacturers, pharmacy benefit managers (PBMs), insurance companies, doctors and healthcare systems, and patients themselves collide in an increasingly elaborate tangle of coupons, discounts, and incentives.

Ricks’ referred in his discussion to “insurance designs” as well as the fact that in “transactions where diabetic patients are processing through insurance and purchasing of a medicine, they are subsidizing people who are well with that purchase.”

One of the major traps faced by insurance manufacturers is the coupon system, where they’re pressured to offer increasingly large discounts to a handful of PBMs in order to have their brand of insulin or another drug listed on a particular formulary. In response, the top-line, sticker price of a vial of insulin increases while remaining relatively flat at the other end.

The result is that for many insured people with type 1, the cost of Humalog or Novolog has remained relatively flat over the years in terms of co-pays, while the list price for an un- or under-insured patient skyrockets. This is the dynamic that’s led to headlines about the price of insulin multiplying 40 or 50 times over the past few decades.

Hopefully, 2020 will see even more progress made on this crucial issue through partnership between activists, the private sector, and the government.

Innovations and expanding opportunities seen for type 1 diabetes technology

On a much brighter note, the conference also featured discussions of potential new medications, therapies, and devices for type 1 diabetes, Close Concerns reported.

Novo Nordisk chief scientific officers Mads Thomsen presented on the company’s efforts into applying stem cell technology to help treat type 1 diabetes and its plan to begin medical trials of type 1 stem cells in human subjects starting in 2021.

“I often use the analogy that we’ve actually been producing FDA-compliant, GLP-grade mammalian cells since the 1980s,” said Thomsen. “The only difference now is that we’re using 30+ years of mammalian cell cultivation and nursing in a way where we don’t use the proteins excreted from the cells but the cells themselves”

A Liquid Nitrogen bank containing suspension of stem cells. Cell culture for the biomedical diagnostic

Thomsen also mentioned that the company’s researchers made positive progress on preclinical stages of developing glucose-sensitive insulin, which could provide a natural response to fluctuations in blood sugar. Early versions of this type of insulin formulated by Novo Nordisk have proven effective at lowering and controlling blood sugar in studies on rats with type 1 diabetes.

For its part, Sanofi acknowledged that it would no longer be investing in diabetes (or cardiovascular health) R&D but did comment that it’s bullish on the international market for insulin products such as Toujeo and Lantus, especially in China, and recommitted to investing in its existing portfolio of diabetes drugs.

Highlighting the increasing role of diabetes technology and hardware

As the technologies and devices used to control and and manage type 1 diabetes have become more sophisticated, the companies making them have raised their profile in the broader industry.

T1D Exchange CEO David Walton has been in San Francisco all week attending the JPM Healthcare conference, and expressed excitement and enthusiasm about the momentum of the presentations and discussions.

“It is fantastic to see the progress made by companies in the type 1 diabetes space, whether they’re developing new tech, raising capital, or providing key updates to the industry,” said Walton. “I’ve met with a number of organizations here, and I’ve never been more optimistic about the innovations that the industry is producing right now.  The future is very bright for type 1 diabetes and the people living and working with it.”

Abbott CCO Robert Ford spoke optimistically about the outlook for FDA approval of its upcoming FreeStyle Libre 2 iCGM. Close Concerns noted Ford’s discussion of the philosophies he says informed the development of the FreeStyle Libre product: a “Fisher Price-friendly” user experience and “latte-a-day” cost levels.

On the infusion side of the industry, Insulet announced that its upcoming Omnipod Horizon, a hybrid closed-loop wearable device, began vital clinical trials at the very end of 2019. Like the Tandem t:slim X2 closed-loop system, the Omnipod Horizon will function in concert with a Dexcom G6 sensor. Insulet CEO Shacey Petrovic especially emphasized two key elements in her presntation.

First, she touted the the adaptability and ease of use offered by the Horizon system, including its ability to adapt insulin dosages and integration of the algorithm directly into the Omnipod device.

Finally, and probably most exciting for our users, we will be the first to market with a personal smartphone control of Omnipod,” said Petrovic. “This is the single most asked for a feature in our system. ” If finalized and approved, the Omnipod Horizon would be the first insulin pump able to be managed and controlled on Android mobile phones.

Insulet also discussed progress on its efforts to get a bigger percentage of its Omnipod Dash shipments covered through pharmacy benefits rather than durable medical equipment (DME) coverage, part of a larger effort to drive conversion from multiple daily injections to pumps. In fact, the companies figures showed that 75-80 percent of its users changed from MDI to Omnipod, and the majority of them shared with the firm that the existence and simplicity of the Omnipod lay behind that decision.

Tandem also had a big week as it formally launched its Control-IQ system on the Tandem t:slim X2 — you can read our article about the developments and CCO Brian Hansen’s thoughts on that here on Glu.

In all, it’s been an informative and productive week for diabetes pharma, tech, and device developments and information, and we look forward to further news in 2020 and beyond.

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