Will it change anything?

Will it change anything?

When Lilly (NYSE: LLY) released data from the EMPA-REG trail many speculated given the results it would vault Jardiance to the top of the SGLT2 category. After all the data wasn’t good it was great and better still Jardiance was the only drug in the category that had real data. Yet as spectacular as this data was it did not help sales as anticipated. As the company has noted during recent earnings call they seeing some movement but not the major move forward many had anticipated.

Sales of Jardiance should have received another boost when adverse label changes were made to its two main competitors, Invokana from Johnson and Johnson (NYSE: JNJ) and Farxiga from AstraZeneca (NYSE: AZN). The speculation was that since neither Invokana or Farxiga had hard cardiovascular data combined with the label changes this would convince physicians to use Jardiance as there preferred SGLT2. Still sales of Jardiance while improving are not picking up as expected.

Some believe that all SGLT2’s will show positive cardiovascular benefits, that it’s a class effect. Yet given the label changes this mindset changed somewhat as many began to believe that maybe all the SGLT2’s does not work the same way. Perhaps their respective methods of actions differed enough to produce different results. The burden of proof seemed to be on JNJ and Astra who did not yet have hard data. Lilly has set a high bar with the EMPA-REG data but the question is when the data comes for Invokana and Farxiga will it make any difference.

As we noted in the past when this data does come expect it to be picked apart six ways from Sunday. The experts will began discussing patient populations, study design, etc.

Now what Lilly is hoping for is that when this data does come in Jardiance will be shown to be superior to Invokana and Farxiga. That all SGLT2’s are not alike, that they are not a commodity. However, in the ultimate irony time is not on Lilly’s side. Here’s why;

First JNJ did an outstanding job of locking up formulary position when Invokana was launched. A position that won’t be changed because of the label changes made. A position which gives JNJ a huge advantage as these contracts are not up for renegotiation. A position that allows Invokana to establish a solid installed base while the data is compiled.

Again as we have noted previously although Lilly has set a high hurdle with EMPA-REG does Invokana and Farxiga have to clear that hurdle. Can they just match the data or come within striking distance, will that be good enough? This data battle is only going to get more complicated as Monday Astra noted they would be launching additional studies for Farxiga.

Try for a moment to think like a payor. The best possible outcome from a payors perspective is that all the SGLT2’s are indeed the same. This allows them to maintain the upper hand when contracts are negotiated. Even better for them would be that either Invokana or Farxiga or both not just match EMPA-REG but exceed it. This would place Lilly on defense and give payors a stranglehold on what they pay.

The fact is payors are in the catbirds seat as this whole data war plays out. There is no compelling reason to make any changes in formulary even with the label changes made to Invokana and Farxiga. Since most of the experts believe that the cardiovascular benefits seen with Jardiance is a class effect no need to favor Jardiance over Invokana or Farxiga. Until there is a clear cut winner, something that won’t happen no matter what the data shows, the status quo is just fine.

Why do we see no clear cut winner? Well we’ve seen this movie before and while this may be a remake the ending will be the same. This same movie is playing out in the long-acting insulin market where all the players are attempting to prove their long-acting insulin shows lower incidence of hypoglycemia. This same movie also played in the DPP4 market. It’s playing out in the long-acting once-weekly GLP-1 market.

The simple fact is as we noted yesterday drug companies can be their own worst enemy. That they cannot prove that their particular drug is not a commodity. That it actually outperforms the others that it is not just somewhat better but truly better. This is what’s going to happen in the SGLT2 market, while all the players battle over data, study design, study participants and how events were classified. They have given payors all the ammo they need to do nothing. They have provided by their own hands cover for the payors to do nothing.

So let’s end where we started will all these studies, all this damn data no matter what it shows will it change anything?