Is there a David out there who can slay Goliath?

Is there a David out there who can slay Goliath?

Earlier this week the FDA approved three new drugs to treat Type 2 diabetes, all from Takeda, Nesina, Kazano and Oseni. The base compound, Nesina is a stand-alone DPP4, Kazano is Nesina plus metformin and Oseni is Nesina plus Actos. These three new drugs will compete against the category leader and blockbuster Januvia from Merck (NYSE:MRK) who reports earnings Friday morning. They will also be competing against Onglyza from the Bristol Myers Squibb (NYSE:BMY) /AstraZeneca (NYSE:AZN) partnership and Tradjenta from Lilly (NYSE:LLY).

The first question that comes to mind is why any physician would prescribe Nesina as like all the drugs before it, the drug is basically a Januvia wannabe. One just might think that the executives at Takeda noticed that neither Onglyza nor Tradjenta has had much success in the market and about the only way they can have any success is to slash prices. Yet nothing anyone has tried has been able to make a dent in the Januvia juggernaut.

This leads to a broader question for all the diabetes drug makers as its beginning to look like the new strategy is to bring to market copycat drugs which offer little differentiation from the market leader and then try to carve out a niche based on the smallest of differences. A strategy that really worked well for Lilly when Tradjenta came to market and Lilly keep telling everyone that drug would succeed because of a supposed advantage with patients who may have liver issues. Tradjenta is doing so well in fact that Lilly doesn’t even bother to publicly disclose Tradjenta sales numbers, although they do have a boatload of Tradjenta toilet paper they can use in the home office.

The same thing is about to occur in the SGLT2 category, where all the compounds look very similar, do about the same thing, the same way with about the same side effect profile. Right now it looks like Johnson and Johnson (NYSE:JNJ) will win the race to be first to market but even with this advantage Diabetic Investor isn’t convinced the drug or this class of drugs will gain much traction in the market place. As we have noted previously the experts we have spoken with have the general belief that while SGLT2’s have some advantages over existing drugs they also have some issues which will prevent broad adoption.

The fact is looking over the various pipelines of new drugs there is nothing all that exciting, with the possible exception of an oral GLP-1 from Merck.  Most of the newer compounds really don’t do much when used as monotherapy and only when metformin is added do we see any real improvements in HbA1c. It also doesn’t help any that Avandia controversy continues to impact the market for new diabetes drugs as the FDA is overly focused on side effect profiles to such an extent that it makes nearly impossible for any new compound to come away without some type of warning. Lastly there is natural reluctance by physicians to try anything new especially when it can take years for side effects to become known, keep in mind that we did not learn of the increased incidence of bone fractures for TZD’s until they had been on the market for over seven years.

Overlooked as well is it’s not like physicians have a shortage of tools to use and looked at realistically the toolbox is pretty full. While it’s been said before it does bear repeating as the biggest problem isn’t the tools available to treat diabetes it’s getting patients to actually use these tools as they are prescribed. Ask any physician, primary care or endocrinologist, what their biggest problem is for their patients with diabetes and greater than 80% will state it’s getting these patients to take all their meds. Remember the majority of patients are not just prescribed meds for their diabetes but are likely tacking 3 to 4 other meds for a wide variety of conditions. This is one reason a drug like Bydureon has such great potential as besides all its known benefits the fact it’s taken just once a week is a huge competitive advantage. Lantus, the world’s number one selling insulin, owes much of its success to the fact it was taken just once a day. We’ve said it before and we’ll say it again the key for new drugs besides safety and efficacy is patient convenience; the fewer times a drug is injected or swallowed the better.

Should drug makers want their copycat drugs to truly stand out, they should stop bombarding physicians with study after study, which they don’t read in the first place, and find ways to help educate patients so they actually take their diabetes drugs as prescribed. This will take on even greater significance when physicians are paid a bonus for getting patients to control and keeping them under control. Given that all these drugs do basically the same thing, the same way it really doesn’t matter which “brand” they use as long as they are actually taking the drug as it is prescribed.

Believe it or not Diabetic Investor see a role for interconnected diabetes management, which is currently better suited for insulin using patients, and patients who use oral meds. Many companies have experimented with pill containers that send a message to a smartphone every time the patient opens the pill bottle, now this doesn’t mean the patient is actually taking the pill but it is better than no information at all or relies solely on refill data which can also be misleading. Although it may bother some patients the day isn’t far away when the physician uses a system that sends a text message to the patient reminding them to take their drugs.  The technology already exists and is being used in a limited way already.

The reality is that drug companies must find new ways to market their me-too drugs or actually get back to the business of developing innovative therapies which actually do better job than what’s already on the market. There is no need to have four different DPP4’s on the market. About the only thing this creates is a price war as newcomers like Takeda won’t gain formulary access without offering something and price is about the only true weapon they have.  The surest way to turn the diabetes drug market into a commodity market is stay on this path of developing me-too, copycat drugs. Frankly this strategy only strengthens the resolve of payors who will continue to demand greater price concessions, having no other choice the company will capitulate realizing there is no other way to gain share.

This is exactly what happened to the glucose monitoring market, is about to happen to the insulin market and based on what we’re seeing could easily happen to the market for oral meds too.