What a difference a day makes

What a difference a day makes

Yesterday we reported on Express Scripts decision to designate Tresiba, the long-acting insulin from Novo Nordisk (NYSE: NVO), as “non-preferred”. This decision put Novo at a competitive disadvantage as patients would be forced to pay a higher co-payment to use Tresiba. The reason behind this decision, Tresiba was just incrementally better than Lantus and therefore not worthy of preferred formulary status.

We also noted that Victoza, the company’s once-daily GLP-1 was excluded from the Express Scripts formulary. A fact that may change once Novo releases data from the LEADER trial which examines the cardiovascular benefits of Victoza. Well that data came today. According to a Novo press release;

“Novo Nordisk today announced the top-line results from the LEADER trial, which investigated the cardiovascular safety of Victoza® (liraglutide) over a period of up to 5 years in more than 9,000 adults with type 2 diabetes at high risk of major adverse cardiovascular events. The trial compared the addition of either Victoza® or placebo to standard of care and met the primary endpoint of showing non-inferiority as well as demonstrating superiority, with a statistically significant reduction in cardiovascular risk. The primary endpoint of the study was defined as the composite outcome of the first occurrence of cardiovascular death, non-fatal myocardial infarction or non-fatal stroke. The superior reduction of major adverse cardiovascular events demonstrated by Victoza® was derived from all three components of the endpoint.”

Needless to say Novo is thrilled with this news and shares of Novo are up big in early trading.

Now before everyone gets too excited let’s take a closer look at the possible impact of this news. In the call that accompanied this news many of the questions directed at the company were related to whether this was class effect or is there something special about Victoza’s method of action. These same questions were directed at Lilly (NYSE: LLY) when they released the cardiovascular data for Jardiance, data which by all accounts was historic.  Yet as good as this data many speculated that all SGLT2’s would see similar results or simply put these cardiovascular benefits were a class effect, therefore muting Lilly’s competitive advantage in this category.

It should be noted in the subsequent earnings calls since the Jardiance news broke, Lilly has not seen a material impact in sales for the drug. The reality is should payors see this as a class effect they maintain the upper hand when it comes to negotiating price and formulary position. The question is will Novo see a material impact in Victoza sales because of this data. Keep in mind there are now three once-weekly GLP-1’s on the market which may show similar benefits, should that be the case, should payors believe this is a class effect, today’s news as good as it is, will do little to improve Victoza sales.

There is also the question of whether physicians will favor Victoza, an injectable therapy, over SGLT2’s which are orals or whether these drugs will be used together. Then there is the question over other side effects, namely pancreatitis or pancreatic cancer. Although the majority of research has failed to show a causative relationship between GLP-1 usage and these adverse events, concerns still exist over this issue.

The bottom line here is as positive as this news appears to be it may or may not result in increased sales of Victoza or improved formulary position. Lilly’s experience with Jardiance is the perfect example of how great data does not necessarily translate into increased sales or improved formulary position. We will obviously learn more in June when Novo releases all the data for LEADER at the ADA conference in what will surly be a steamy New Orleans.  Stay tuned as this could get very interesting.