Wacky Monday

Wacky Monday

Ironically today is World Diabetes Day and in honor of this day the diabetes world has become overly wacky.  Per a press release from our friends at Lilly (NYSE: LLY);

“New data presented today at the American Heart Association Scientific Sessions 2016 showed that Jardiance® (empagliflozin) tablets consistently reduced the risk for cardiovascular death, regardless of the type of cardiovascular disease at baseline, compared with placebo when added to standard of care in adults with type 2 diabetes and established cardiovascular disease. The findings are part of the landmark EMPA-REG OUTCOME® trial, which is the first trial of a diabetes medication to show a reduction in cardiovascular death in adults with type 2 diabetes and established cardiovascular disease. This study is supported by Boehringer Ingelheim and Eli Lilly and Company (NYSE: LLY).”

Listen we all know that the EMPA-REG data was groundbreaking. Yet we also know that as groundbreaking as this data is it hasn’t made a difference where it counts, sales. Yes, sales of Jardiance have improved slightly since this data became public but it has not vaulted Jardiance to the top of the growing SGLT2 category. As we witnessed from the results released by Johnson and Johnson (NYSE: JNJ) and AstraZeneca (NYSE: AZN) whose SGLT2’s has no hard-cardiovascular data, SGLT2’s is viewed by payors, the people who count, as commodities.

This is somewhat shocking considering that both Invokana and Farxiga have had other issues which would seem to favor Jardiance. But then again, these issues are not viewed upon by payors as significant enough to offset a much more important issue, money. JNJ to their credit locked up formulary position for Invokana before Jardiance arrived. AstraZeneca realizing that they had nothing to lose and everything to gain used the only weapon they had to boost Farxiga heavily discounting and rebating the drug.

But the wackiness does stop here, check this out. Per the HME News web site;

“The OIG is required to report the market share of diabetic testing strips before each subsequent round of the competitive bidding program to help CMS determine how the National Mail Order Re-compete may impact shifts in the market.

The first of three data briefs will determine the market share of diabetic testing strips for the three-month period immediately preceding the implementation of the National Mail Order Re-compete on July 1, 2016 (April through June 2016).

The second report will be for the three-month period immediately after implementation (July through September 2016) and the third report will be for a similar time frame six months after implementation (October through December 2016).”

Yep leave it to our government to waste time and taxpayers money on something that will have no meaningful impact. Listen we already know that competitive bidding while not the main reason the conventional glucose monitoring market is in the toilet was the final nail in the coffin. Does it matter which no-name ultra-cheap monitor is gaining share in this channel? Will the government change the competitive bidding program in any meaningful way because of these reports?

The answer to both is questions are NO and NO.

We mention this for two reasons. First it should send a clear message to those in the diabetes community who believed competitive bidding would somehow help patients, that the surest way to ruin a market is to get the government involved. How anyone would be foolish enough to believe that the goal here was to help patients astonishes Diabetic Investor. Competitive bidding was brought about for one reason and one reason only; to save money.

Secondarily this should tell these same people what would happen if they get what they are clamoring for, namely get the government to solve the out of pocket cost of insulin problem. A problem which if these people were living in the real world would realize was created by the government. They can villainize the insulin companies all they want. However, the insulin companies did not create high deductible insurance plans the Affordable Care Act designed and implemented by the government did that.

Listen we have no idea what is going to happen to the Affordable Care Act now that Trump is President. Will it be repealed? Will it be fixed? As with most things we have seen with President elect Trump since the election there are lots of mixed messages being sent. He stated he wants to keep parts of the act but then his staff says nope the act will be repealed. But one thing is sure based on history the surest way to make a problem worse is get to the government to fix it. We’ve said it before and we’ll say it again if these people think the problem is bad now just wait as competitive bidding proves the government has no place trying to determine market winners and losers.

What these two events have in common is it proves that when it comes to this wacky world it often comes down to money, who makes it, who saves it and who spends it. This is not about improving patient outcomes. This is not about helping to make diabetes a more affordable disease to manage. This isn’t about the patient at all, this is about money. That all this talk about helping the patient no matter where it comes from is merely lip service.

As Momma Kliff used to say; “Some people see the world not as it is but as they want it to be. They cannot accept what is going on, choosing instead to believe in some sort of alternate universe. Worst of all they cannot accept that if they get the things they want that things could get worse, a lot worse.”