Adherence vs. Cost

Adherence vs. Cost

We don’t want to beat a dead horse, unless that horse resides in Paris, but it’s a well-known fact that patient adherence, getting patients to take their medications as prescribed is one of the biggest challenges. There is near universal agreement that if this problem could be solved patient outcomes would improve dramatically.

Over the years Diabetic Investor has seen hundreds of possible solutions. Our argument has always been the most effective method for improving patient adherence is patient education. There are hundreds of studies that prove this. The main problem with education has not been whether it works but generating a return on investment. Companies know that education works but what they cannot control is whether the patient will use their products once they are educated.

Now today with interconnected diabetes management systems (IDMS) this may change. As we noted Johnson and Johnson (NYSE: JNJ) is attempting to build a diabetes management echo system. Included in this system is the ability for the patient to refill their prescriptions, testing and pump supplies.

We’re also aware of several companies who will use the carrot and stick approach. As we predicted long ago the day patients will be incentivized for being loyal has arrived. Simply put these companies are basically bribing their customers to become better educated and brand loyal.

While we see some hope here the straightest line to improved patient adherence is to make the therapy option stupid. Yes, we just said stupid. Simple, easy and with as little patient interaction as possible. As the late Al Mann used to say; “The more chances you give a patient to screw up the more likely they will.”

Today Intarcia Therapeutics announced they have raised another $215 million and they expect to raise even more money in the 4th quarter. According to a company issued press release;

“Intarcia Therapeutics, Inc. today announced the first closing of a major equity financing that puts the company in a strong strategic and financial position over the next 2-3 years as it prepares for the potential approval and launch of ITCA 650 late next year, and the parallel progression of several novel pipeline programs in major chronic diseases like diabetes, obesity and auto-immune/inflammation. The first close of $215M financing includes subscriptions from new world-class institutional investors, family offices, and our first large and long-term oriented VC/PE fund* located in China – where type 2 diabetes already impacts well over one hundred million patients. The first close also includes support from existing investors that have come into the company over the last 5-6 years. The Company expects a larger second close with additional top-tier investors in 4Q.”

Frankly we are not surprised that investors are jumping at the chance to invest in Intarcia as they have the simplest, most elegant solution to patient adherence. The ITCA 650 is a micro-pump which once implanted in a patient delivers a year’s supply of exenatide. Exenatide is a GLP-1 which means there is little risk of hypoglycemia, solid glucose control and the possibility of weight loss. Better still, unless you happen to be a BGM company, there is virtually no need for patient using GLP-1 therapy to monitor their glucose levels.

Think of this, a patient walks into their physician’s office, has the pump inserted and that’s it for 12 months. No daily injections. No glucose monitoring. No trips to the pharmacy for refills.

The issue facing Intarcia is will payors pay for this innovative approach, will they in essence put their money where their mouths have been. Payors talk a good game when it comes to patient adherence knowing that before this product came along they had little to worry about. It is not an overstatement to say that the ITCA 650 could be a paradigm shifting product. Even more paradigm shifting than the oral version of semaglutide being worked on by Novo Nordisk (NYSE: NVO). Like it or not even in pill form the patient must take the pill.

Lilly (NYSE: LLY) has recently cut deals with payors for their once-weekly GLP-1 Trulicity. These outcomes based deals are based in part on the fact that patients only have to inject once each week.

Hopefully by now everyone is seeing a trend here, first all of these products are GLP-1’s. Second they are targeted at patients with Type 2 diabetes, the largest patient population.  The GLP-1 class is undergoing a natural progression – Byetta is a twice daily injection, Victoza is a once-daily injection – Trulicity, Tanzeum, Bydureon and soon semaglutide are all once-weekly injections and finally the ITCA 650 zero injections.

Now we know there will be other obstacles to the ITCA 650 but the reality is none of them cannot be overcome. Look at this from a slightly different perspective, soon physicians will be reimbursed based on patient outcomes, physicians who know that therapy adherence is the single largest obstacle between the patient and better outcomes. Physicians who will make money when they insert the ITCA 650, yes this simple procedure is reimbursed. And did we mention there is NO patient training, no need to educate the patient. One simple office visit and that’s it.

It’s time to see if patient adherence really does matter to payors. It won’t be long before the ITCA 650 is ready and that’s when the real fun begins. Or Momma Kliff used to say; “Well you’ve talked a good game now it’s time to put up or shut up.”