Cost vs. Convenience

Cost vs. Convenience

According to a study published in the Lancet last week, degludec – a new long acting insulin under development from Novo Nordisk (NYSE:NVO), proved to be  as effective as Lantus, the current top selling insulin from Sanofi Aventis (NYSE:SNY).  According to the study; “Of 367 patients screened, 245 were eligible for inclusion. 62 participants were randomly allocated to receive insulin degludec three times a week (starting dose 20 U per injection [1 U=9 nmol]), 60 to receive insulin degludec once a day (starting dose 10 U [1 U=6 nmol]; group A), 61 to receive insulin degludec once a day (starting dose 10 U [1 U=9 nmol]; group B), and 62 to receive insulin glargine (starting dose 10 U [1 U=6 nmol]) once a day. At study end, mean HbA1C levels were much the same across treatment groups, at 7·3% (SD 1·1), 7·4% (1·0), 7·5% (1·1), and 7·2% (0·9), respectively. Estimated mean HbA1C treatment differences from insulin degludec by comparison with insulin glargine were 0·08% (95% CI −0·23 to 0·40) for the three dose per week schedule, 0·17% (−0·15 to 0·48) for group A, and 0·28% (−0·04 to 0·59) for group B. Few participants had hypoglycaemia and the number of adverse events was much the same across groups, with no apparent treatment-specific pattern.” (Highlighting added by Diabetic Investor)

With Lantus set to go off patent in 2014, Novo sees an opportunity for degludec to become a Lantus replacement. The real question, assuming degludec makes it through the FDA approval process unscathed, which will win out – the generic version of Lantus or the convenience of degludec which would only needs to be dosed three times per week.

In an ironic twist this is almost the exact same situation Novo will face when the FDA approves Bydureon, the once weekly GLP-1 from Amylin (NASDAQ:AMLN), Lilly (NYSE:LLY) and Alkermes (NASDAQ:ALKS), which will compete with Victoza Novo’s once daily GLP-1. Although this is not a strict cost vs. convenience issue, Diabetic Investor believes Novo will use cost as method to prevent patients from switching from Victoza to Bydureon.

In both cases Novo will have study data to reinforce their respective positions on both drugs. For degludec they will stress the convenience of less dosing, while for Victoza they will stress a recent Amylin study which showed that Victoza outperformed Bydureon.

It will interesting to see how this situation plays out as there are many, Diabetic Investor included, who believe patients and their physicians will prefer therapy options which require fewer administrations. This is the reason we believe Bydureon will trump Victoza and degludec has a chance to compete with Lantus. When it comes to achieving better outcomes therapy compliance is critical and a main reason why nearly two thirds of all patients are not under good control. Simply put the fewer pills that need to be taken or the fewer injections the better.

This is also the reason Diabetic Investor didn’t freak out like so many other did when the Amylin study came out that indicated that Victoza actually produced slightly better outcomes than Bydureon. The simple fact is the difference in outcomes wasn’t that great and when it comes to dosing options, once-weekly beats once-daily.

The reality, especially in today’s environment is that while convenience is important, you cannot ignore cost. As we have seen time and time again, when it comes to reimbursement and formulary positioning insurance companies place a greater emphasis on costs than they do on convenience. Diabetic Investor sees this situation as especially problematic for Novo. Just as Victoza performance edge over Bydureon was slight, so was degludec performance against Lantus. 

The situation could get even worse for Novo if Amylin prices Bydureon competitively and does not seek too much of a premium for the drug. It’s a forgone conclusion they will not be able to compete price wise with a generic version of Lantus. When this is all said and done Diabetic Investor believe Bydureon stands a greater chance of gaining acceptance because the once-weekly administration is a compelling performance difference, while the once every three day dosing of degludec is only a slight advantage over the once daily Lantus.  

The bottom line here is when it comes to cost vs. convenience, cost will win no matter what even if that means patients are not better off in the long run.