Needle-free diabetes will have to wait: payers are pressuring pharma to provide lower medication prices, and Novo Nordisk has responded by redirecting its R&D strategy into more innovative research.
Despite its position as a world leader in diabetes, Novo Nordisk seems to be hitting a rough patch: the big pharma is reducing its profit and growth projections, firing 1,000 employees and abandoning the development of oral insulin for diabetes.
The changes come along with the recent appointment of a new CEO, Lars Fruergaard Jørgensen, who will take over in January. Novo Nordisk strategy will now focus on projects with higher innovation that tackle diabetes indirectly by targeting related diseases such as non-alcoholic steatohepatitis (NASH), cardiovascular disease and chronic kidney disease.
The decision to change its R&D strategy is based on the current challenges of the market: payers are reluctant to spend a lot more on drugs that only provide a small increase in efficacy. This is a serious concern in diabetes, where some insulin drugs have increased their price almost 10 times in the span of 20 years. For a condition where your life depends on daily insulin injections, this is a huge deal.
Needle-free options for diabetes are a highly sought-after goal. However, oral insulin is particularly challenging since it is almost impossible to protect the delicate molecule through the whole digestion process. In 2007, Pfizer already failed to profit from Exubera, a form of inhalable insulin, making the company lose €2.54M ($2.8M).
With this move, Novo Nordisk may avoid making a similar mistake by focusing on areas of high unmet need that aren’t already crowded. Instead of developing an overpriced product with limited activity, the company will now focus on semaglutide, an injectable GLP-1 analogue that can reduce heart attacks and strokes by 26% in diabetes type 2.
Payers are starting to reject excessive prices on medications, and Novo Nordisk’s changes indicate that big pharma are starting to incorporate the market needs into their strategies. As pricing scandals are increasingly common, other companies might take note and follow suit.
Featured image by Leszek Glasner/shutterstock.com
Figure from The Washington Post
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