Just a first step

Just a first step

Much is being made out of statements made by FDA Commissioner Scott Gottlieb on the subject of insulin. Social media is full of reports of how Commissioner Gottlieb is calling out the insulin companies as if this public rebuke will somehow lower what the patient pays for insulin. Now we hate to burst anyone’s bubble here but it’s time to outline a few of those pesky facts.

We agree completely with Commissioner Gottlieb there should be an easier path for generics and that there are times when insulin companies use shenanigans to protect their lucrative insulin franchises. This really has never been in dispute. However, what’s ironic here is that even with the somewhat convoluted path for approval of a biosimilar it can and has be done. For this is exactly what Lilly did with their biosimilar long acting insulin Basaglar®, a product which has decimated this market segment from a price perspective.

And guess what it’s also been done by Sanofi with their short-acting biosimilar Admelog®. However, Admelog has yet to do to the short-acting market segment what Basaglar has done to the long-acting market. As Sanofi being Sanofi cannot help but screw up what should be a winning lottery ticket.

It’s interesting in this debate over the “high” cost of insulin it focuses on short not long acting insulins. In other words, Basaglar entry into the market has made this type of insulin more affordable. If patients really want to bitch someone out, they should direct their displeasure on our wine drinking friends in France. The fact is Lilly and Novo Nordisk are once again benefiting from Sanofi being Sanofi. Until Sanofi gets the memo prices for Humalog and Novolog will remain where they are.

Here is something that also gets lost in this argument over the high cost of insulin. Unlike pills which become generic manufacturing insulin on a huge scale isn’t simple, easy or cheap. It’s no accident that Lilly and Sanofi have the only two generic insulins as they already know how to manufacture insulin on a huge scale. It’s not like a company can just throw up an insulin manufacturing facility and start selling generic insulins.

Let’s be honest about this one reason patients, physicians and payors adopted Basaglar was not just it’s lower price point. They had confidence in the product because Lilly was the company making it. While there is no way to prove this, we doubt any generic would have such strong adoption had it come from some company no one ever heard of.

Which brings us to another point as both Lilly and Sanofi have the infrastructure in place not just to manufacture insulin but to sell, distribute and support it. Making insulin is only step one, once made it has to get into the hands of patients which requires navigating the payor minefield, dealing with distributors and educating physicians. Which makes us wonder even if some company came along which could make a generic insulin would they the infrastructure in place to sell and support it.

While we are all for more affordable prices let’s also be clear what will be given up here. As everyone who is clamoring for better insulins has to understand there will be little incentive for any insulin company to spend money on this if they don’t see a reasonable return on their investment. Just look at the pipelines of all the major insulin companies as they have basically given up on developing anything new in the long acting segment. Something that will also happen in the short-acting market once Sanofi get their act together or someone else comes along with a biosimilar short acting that knows what they are doing.

We applaud Commissioner Gottlieb for his comments although let’s be honest here he was in no danger of being unpopular for taking on the insulin companies or coming out publicly for lower insulin prices. Yet what gets lost here in all the rancor is to a large extent we are already where we need to be. Lilly may not be making huge margins on Basaglar, but we don’t hear them complaining either. Sanofi could and quite frankly should be in the same position with Admelog but because of their continued incompetence in diabetes we are not.

People might wonder why we make such a big deal of having a talented management team. This is the reason right here as with a talented team everyone wins. The company wins as they make money, the stakeholders in the company win and patients win too. Lilly proved it can be done in the long acting market. Yet Sanofi being Sanofi hasn’t held up their end in the short-acting market, so everyone loses.