The diabetes drug space like any drug category is ultra-competitive and drug makers will look for any edge no matter how slight to gain an advantage. This is particularly true in a category that has commoditized. It’s a rare situation that any drug owns a category with little or no competition such as Lantus did years ago. Today no matter where you look in diabetes there are three sometimes more choices and like the device side most of these drugs do the same thing the same way.
As with every rule there is an exception as sometimes one drug stands out and has a clear advantage. In diabetes that category is SGLT2 which has three entrants – Invokana from Johnson and Johnson (NYSE: JNJ) – Fraxiga from AstraZeneca (NYSE: AZN) and Jardiance from Lilly (NYSE: LLY). Starting with the groundbreaking EMPA-REG data Jardiance has had a clear advantage over Invokana and Farxiga. However as groundbreaking as EMPA-REG was Jardiance still faced an uphill battle in terms of sales.
Per the most recent earnings announcements Invokana leads the category with worldwide sales of slightly over $1 Billion followed closely by Farxiga also slightly over a $1 billion with Jardiance a distant third place at $447.50 million. These sales results reflect are a clear example that when it comes to treating diabetes superior data doesn’t matter. That this is and always has been about money.
Since EMPA-REG came out JNJ and Astra have also released their cardiovascular data which didn’t come close to EMPA-REG. It’s also true that both Invokana and Farxiga have received adverse labels changes. Yet they still they lead the category. Ask any physician which of these three drugs they think offers the best profile and it’s Jardiance hands down. This is one case when all the data is laid out side by side Jardiance stands out.
Reviewing the transcripts from the recently completed earnings calls it’s clear all three companies are experiencing “headwinds” in the category. The decision to update the label for Invokana due to concerns over the risk of leg and foot amputations has clearly hurt the category even though no changes were made to the labels for Farxiga or Jardiance. It also didn’t help that the FDA issued a warning due to concerns over urinary tract infections.
Some researchers we have spoken with are privately concerned we may have another Avandia controversy brewing. Keep in mind although Avandia was eventually cleared but it was too late. It’s also important to note that many of the issues identified with Avandia and Actos did not appear until after the drugs were on the market for nearly 7 years.
The reality here is that situation surrounding the category has created an almost perfect storm from the payors perspective. JNJ and AstraZeneca understanding that their data set is inferior to Lilly’s have used price combined with rebates to fight. This in turn has prompted Lilly to fight back creating yet another price war. Not like they needed more ammunition these concerns over the category have given payors even more leverage.
Now if we lived in a world where outcomes mattered, where the needs of the patient came before the needs of payors there is no way any payor would select Invokana or Farxiga over Jardiance. There is no question in anyone’s mind that taken as whole Jardiance offers the most compelling data set. Yet we do not live in that world. No in the world we live in it’s all about money.
It will be interesting to see how this plays out over time. Will more data surface which hurts the class? Already the class action attorneys are trolling for Invokana users hoping to score a big payday. Think of the looming disaster should either Farxiga or Jardiance get hit with adverse label changes. This is not just a legal nightmare but it’s Avandia all over again. A nightmare where everyone ended up with egg on their face, the FDA and that crusading cardiologist Dr. Nissen.
We would say that everyone involved here would have learned a valuable lesson from the Avandia controversy. But we would be wrong, the reality is this is all about money. This isn’t about what’s best for the patient. So, as we have said many times the more things change the more they stay the same.