Are insulin analogues worth the cost?

Are insulin analogues worth the cost?

“At the macroeconomic level, we know that the rise of insulin analogues has had a substantial financial impact on the NHS, yet over the same period there has been no observable clinical benefit to justify the investment. It is likely that there was and is considerable scope for financial savings. Most worryingly, the clinical role and safety of insulin for use in people with type 2 diabetes is being questioned.” (BOLD added by Diabetic Investor)

This is the conclusion drawn from a study published today in the respected British Medical Journal entitled – “Evaluation of the incremental cost to the National Health Service of prescribing analogue insulin”.  A conclusion that when taken in its entirety should scare the daylights out of the major insulin companies, Novo Nordisk (NYSE:NVO), Sanofi-Aventis (NYSE:SNY) and Lilly (NYSE:LLY). The authors are not just questioning the cost of insulin analogues but insulin therapy as tool to manage type 2 diabetes. The authors are basically stating that not only are insulin analogues too expensive, that insulin therapy is neither safe nor effective for patients with type 2 diabetes.

Considering that governments around the globe are going broke, healthcare costs continue to rise and diabetes continues to grow at epidemic rates it would be foolish for insulin companies to ignore the potential impact of not just this study but others that have reached similar conclusions. According to the study, “The Institute for Quality and Efficiency in Healthcare (IQWiG) in Germany has questioned whether the benefits of insulin analogues are sufficient to outweigh their increased cost.” Although the FDA does not YET consider cost when approving medications and that United States does not YET have a single payor system for healthcare, it would equally foolish to believe these studies will not impact decisions made here in the US.

To Diabetic Investor it’s more disturbing that these studies are questioning the safety and efficacy of insulin therapy with type 2 patients rather than how much this therapy costs. The authors state; “Furthermore, although the period from 1997 to 2007 saw the introduction of insulin analogues and general increase in diabetes-related care, this was not accompanied by an improvement in glycated haemoglobin levels in patients with type 2 diabetes treated with insulin. There is currently no systematic means of measuring the other clinical benefits associated with analogue insulin, such as rate of symptomatic or nocturnal hypoglycemia, making it difficult to judge the real-world cost effectiveness of these drugs. An analysis of open-source Hospital Episode Statistics (HES) data shows that growth in hospital admissions for hypoglycemia has exceeded growth in the prescribing of insulin.”

Diabetic Investor will not dispute that since the introduction of insulin analogues we have not seen an improvement in outcomes for type 2 patients following insulin therapy. However, we believe this has more to do with the lack of patient training and education than what type of insulin the patient is using. Looking at the available data even before insulin analogues were introduced outcomes weren’t that great. It’s not as if insulin analogues are producing inferior outcomes rather they are producing outcomes similar to those seen with human or animal insulin’s. To Diabetic Investor the final statement in the above paragraph is perfect example of the poor quality of patient training and education.

As the authors state; “ insulin analogues are associated with reduced weight gain, less hypoglycemia (partially nocturnal), improved lowering of post-prandial glucose and improved dosing schedules” the fact that “hospital admissions for hypoglycemia has exceeded growth in the prescribing of insulin”, tells Diabetic Investor that patients are not receiving the training and education they need to use insulin therapy effectively.

To Diabetic Investor these studies that look at the cost benefit analysis of insulin therapy are eerily similar to the studies that concluded patients with type 2 diabetes do not benefit from monitoring their glucose levels. Here as well it comes down to patient education and training. The simple fact is diabetes is a very complex disease state and there is no such thing as one size fits all diabetes management system. What these authors ignore by just looking at the data is the role the patients themselves play in achieving better outcomes. The authors seem to ignore the many studies that prove that when type 2 patients are properly trained and educated they achieve better overall outcomes.

The disturbing reality here is that we are entering very dangerous territory should payors begin to limit or worse stop reimbursement for insulin when used for a patient with type 2 diabetes. The data is overwhelming that the majority of patients using oral medications alone are not achieving better outcomes which lead to even greater healthcare costs down the line.

It’s equally disturbing that the authors of this particular study believe greed is behind the increased usage of insulin analogues. They state; “The increase in the use of analogue insulin is likely to be due in part to successful marketing.” They go on to state; “Finally, a move to patented insulin products has notable commercial benefits for manufacturers.” Again we won’t dispute the statement on patented products however marketing efforts alone does not explain the increased usage of insulin analogues. To somehow believe that physicians are duped into prescribing insulin analogues just because of some commercial or advertisement is ludicrous. The reason physicians are prescribing insulin analogues is that they have looked at the data and concluded they are better than human or animal insulin’s.

Yet these facts won’t stop the cost cutting freight train that has already decimated the glucose monitoring market and now is headed towards the insulin market. Insulin companies if they are not already should be afraid, very afraid. Not only are they facing threats from generics and the increasing usage of GLP-1 therapy, they now must contend with an increasingly hostile reimbursement and research environment.

The sad reality here is Diabetic Investor believes that due to these studies insulin will follow the same path as glucose monitoring. Once payors had study data that concluded type 2 patients did not benefit from regular glucose monitoring they began cutting reimbursements rates and increasing co-payments. Simply put these studies provided the payors with the cover they needed to justify what in reality was another attempt to lower their costs and improve margins. Unfortunately Diabetic Investor believes it’s just a matter of time before this happens for type 2 patients who use insulin.

We’re also anxious as to what this could mean for the GLP-1 market. As Diabetic Investor has noted GLP-1 therapy offers several compelling advantages over insulin therapy for type 2 patients. Yet it is also true that like insulin, GLP-1‘s have their own set of adverse events. Will we one day be seeing studies that conclude that GLP-1 therapy is not worth the cost? Is it possible in this zest to cut costs that ultimately payors will be the ones limiting treatment options for type 2 patients? Is a consequence of all these studies that while initially lowering healthcare costs in the short term that over long term healthcare costs will actually increase due to the many complications associated with poorly controlled diabetes?

The harsh reality here is that everyone continues to ignore the pink elephant that stands in the diabetes room in that it really does not matter which therapy a type 2 patient follows if that patient is not properly trained and educated on how to effective use this therapy option. As we noted earlier this week insulin therapy while very effective is not that simple to implement. There are a host of factors a patient must contend with when using insulin.  However, none of these studies take these facts into consideration. The simplest way to look at this is take two type 2 patients, one well trained and educated on insulin therapy and another with minimal or no training , any guess on which patient will achieve better outcomes?

What all these studies do is drive diabetes management down to the lowest common dominator ignoring the complexities of real world diabetes management. They view diabetes management in a void as if the use of insulin alone is the only factor which relates to outcomes. They see pharmaceutical companies as the enemy more concerned with profits then outcomes, ignoring the fact that better outcomes lead to increased sales.  Most troubling of all they ignore the real world repercussions of their research.

Diabetic Investor is no neophyte and understands the important role research plays in helping patients with diabetes. Nor are we naïve and believe companies have some altruistic motive for developing and promoting new drugs and devices. We further understand the need to control healthcare costs. However, what’s missing here is some balance and perspective. The fact is while it would be extraordinarily effective, both from a cost and outcomes perspective, to make sure patients on insulin therapy receive the training and education they need, the simple fact is this is just not happening.

Payors would rather spend $30,000 for a leg amputation caused by poorly controlled diabetes than take that same $30,000 and spend it on patient education which would have prevented this complication. The reason is simple the $30,000 spent on the amputation is a maybe cost and the $30,000 spent on education is an actual cost. Truth be told, payors basically do their best to manage their diabetes patients until they become eligible for Medicare, hoping that they can avoid any large costs along the way. Their hope is that by the time complications set in the cost to treat them will be picked up by taxpayers.

Diabetic Investor, along with many others, has long believed that it’s just a matter of time before the US moves towards looking at drugs and devices not just from a safety and efficacy standpoint but move towards a cost benefit analysis as well. We can only hope that some balance is brought to the system and along with their zeal to control costs the patient is not denied access to effective treatment options. Our concern here is that short-term savings will only later return as larger costs down the road.

Given the way things are going every company in the diabetes market, drug and device, should be afraid- very afraid.