Novo Nordisk pledge re insulin price increases

Treatment Insulin
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[quote=“rgcainmd, post:13, topic:57893, full:true”]
The old, cynical, and bitter part of me (which grew three sizes the day my daughter was diagnosed with T1D) believes that the primary incentive to slow the pricing increase is to look good on Twitter. And sliding in a little extra free advertising for Tresiba isn’t hurting, either. They don’t give a hot damn about us. Whether we little people will see any benefit after the PBMs take their grubby, greedy little fingers off the vials and pens of insulin that we actually already paid for with our insurance premiums and continue to pay for with our astronomical co-payments is yet to be seen. I’m not holding my breath. They think we are complete idiots: “Oh how nice of them not to increase their costs as much as the other Big Boys. They’re doing this because they, too, are outraged at how much we pay every month to stay alive and they know it will make the other manufacturers not increase their prices as much either, and pretty soon every pharmaceutical company will see the error of their ways and will care about making the world a less expensive place for people who need medications, and we will all live happily ever after. The End.” NOT.

A little more vitriol for good measure. I’m probably preaching to the choir, but here goes. I honestly believe that they developed Tresiba (and put some real effort into actually making this better than the other long-acting insulins on the market) because they finally read the writing on the wall and realized they were complete doofs for not diversifying earlier in the game like the other Big Boys did (the ones who produce meds for diseases other than D.) Yeah, I believe (or I’d like to think) that the scientists who worked long, hard hours to develop Tresiba were driven by a genuine desire to benefit mankind. But that’s about the extent of it as far as my shriveled black heart is concerned. I realize that R & D costs far more than most people will ever realize. And I know that the Big Boys are no different from any one of us in that we all want to make a buck.

But this? Thank you so very much for not increasing your prices more than you think we think you probably could. This is not an act of altruism. It is a CYA move; their well-paid market analysts likely said “If you don’t do this, you stand to lose more than you will gain.”
[/quote]Rose, your libels against various peoples and companies in the health care industry really bother me.

Physicians are not all greedy jerks playing golf most of the day. Lawyers are not all a bunch of shysters. And on and on. Indeed, for the most part, doctors and lawyers are good people, trying to help those they serve professionally.

Why you think its any different at Sanofi, Lilly, Novo Nordisk, etc. makes me sad. A lot of people here share those derogatory views.

And they’re wrong, and unfair.

Are there people in the pharma industry that are greedy, self-centered, narscissitic jerks who don’t give a damn about the patients, but see us as you describe? Of course. Guess what? They’re doctors like that too.

Are most people in pharma like that? Most doctors? No. Of course not.

We may not agree with every priority and aspect that goes into a decision to pursue a particular treatment possibility, and of course making money (or seen differently, a living) is usually one of them. However, in my travels around the medical device and pharma industries – light travel, I admit, but not completely without getting to know some people – the desire to help people and possibly even cure them is prominent. This applies to executives down through managers to grunts.

I have an Omnipod because John Brooks III, the founder of Insulet, saw a better way for his T1D son. It was never about greed. The story’s very similar for Dexcom too.

Note that both Dexcom and Insulet, companies we are both customers of and love their product, continue to lose money. Neither has ever made a profit. Yet, many here point the finger of greed at these companies, especially Dexcom, for their prices. What greed: The compulsion to lose MORE money?

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You know, my strong belief in the superiority of the free market keeps me from supporting government price controls on pharma, but I’m getting closer and closer to throwing in the towel since the rest of the world refuses to participate in a “free” market, so we’re getting screwed.

I do wonder what would happen if we in the US told the rest of the world we are regulating pharma prices, and will be paying the same paltry $25/vial for Novolog that everyone else is.

Non-americans, how bad do you want Novolog? As this article certainly implies, if we regulate prices in the US to the same levels the rest of you are paying, Novolog, as well as Tresiba and everything else Novo Nordisk makes, will be gone.

Whether drugs are paid out the patient’s pocket, by an insurer, or a national health system, we all should be paying the same.

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@Dave26, I largely agree that the individual people in these companies may be great people motivated by altruism. I used to be a bioengineer and many of the people I went to school with are now ensconced in pharma jobs. They were all really nice people with at least moderately altruistic motives for entering the field.

However, I think the issue is that the whole financial incentive landscape in this field is skewed just enough that people, who, individually, may have an altruistic motive, are nudged just a little, little, little to make decisions that wind up weighing profits over public good. Sometimes those two motives are in sync and sometimes they are in direct conflict, and in those latter situations, there’s a tremendous level of pressure to push for outcomes that will maximize profits. (indeed, a business’ whole survival and workers’ livelihoods depend on stock price, to a certain extent.)

This is the direct result of a free market system in which profits and dividends are accrued quarterly. In my opinion a quarterly business cycle is ill-equipped to provide the best innovation benefits for drug development. In other scientific arenas this was acknowledged 60+ years ago, and the basic research pipeline works pretty well with government funding.

By the way, I think the price inflation in the U.S. goes all the way down the healthcare chain. Healthcare jobs are some of the best paid compared to other fields, whether that’s the ultrasound technician or the person in medical billing, the physician assistant or the doctor. So it sort of makes sense in a field awash with money that people in pharma would be comparing themselves to others in their milieu, and think that the 18% profit margins they accrue (and the hefty salaries that come with it) are natural and fair and right. But at this point I think we’ve reached a breaking point and long-term, all pharmas will have to get used to profit margins more in line with other industries.

I agree that other countries should pay a little more and the U.S. a little less for drugs, but unlike you, I don’t think the same price should be found across the board. That isn’t even in line with free-market principles! In true capitalist fashion, the price is what the market will bear in any given locale, and different locales have different prices they’re willing to bear. There is no single “global” market.

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I don’t think this it is political as both parties do the corps are king…It was more stating a fact. I really can’t see USA going with the universal health care, like the rest of the developed world.

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Poor novo nordisk is down to a $91 billion market cap after such a rough year in which their stock price is down 40%. I hope they manage to recover.

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Sam, just want to clarify that my “Like” is based on my belief that your post was mostly sarcastic.

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I run the risk of your disapproval for making a “political” post, but I’ll take that chance.

Based on the last sentence of this post, you must have never visited a lesser developed country. Or if you have, you must have never encountered insulin-dependent diabetics or thought about how they live. The level of care in a place such as the one I was born in, for example, makes me want to cry. I thank my stars every day that by random luck I ended up in the US years before my T1D showed itself. I am not going to say I would’ve been dead otherwise (I am, after all, thinking of a low-middle-income place and not a truly desperate one where a diabetes diagnosis might still in fact be a death sentence), but I would have never had the chance to use all the technology (pump, CGM, test strips…) and medication (Novolog specifically) I have access to here. My control would never have been so good and I certainly couldn’t almost forget that I have diabetes and live my life quite normally many hours of most days.

Take a look at this, esp. the last two columns in Table 1 (adequacy of insulin supply): https://www.idf.org/sites/default/files/attachments/article_464_en.pdf. (Yes, they are extrapolating and all, but even if the precise numbers are estimates, I trust the general comparison trends across regions.) I read it and wept, not sure if you’d have the same reaction.

Here is a little more reading on the topic of global disparities when it comes to diabetes: http://apps.who.int/medicinedocs/documents/s17533en/s17533en.pdf . Have you ever wondered why until five years ago 3 (three!) companies from advanced economies controlled 95% of the WORLD insulin market? Or why human insulin has been virtually phased out? (Hint: it’s NOT because it’s less safe or effective for the majority of patients.) You call this “free”?!? There is no free market (in any industry) at this point – we have long now been at the stage of advanced capitalism, whose dynamics are far removed from this idealized picture of the “free hand of the market”. (If that was ever true.) The major symptoms are short-termism, financialization of everything and massive reduction of public services, followed by acute inequalities across the board. So while my heart aches for others in less fortunate places around the world simply as a human being, in a much more self-interested way I am also worried that here in the US we are essentially headed in the same direction. Some might say this sounds alarmist, but I have seen how it works in other places that are more vulnerable to the consequences and it’s not pretty.

There is no free market and as far as I am concerned, in the sphere of medicine, there shouldn’t be. Nobody thinks in the rational Homo Economicus mode when it comes to their (or their loved ones’) health. When it’s a question of life and death (as it is with insulin, among many other medical treatments), we really need to rethink the model. I don’t presume to have the answers (and the picture is complex, as Sam19 points out), but we must start by rethinking these assumptions of “letting the free market do its thing” as the solution.

Yes, even if no individual scientist or even entrepreneur is primarily motivated by greed on the personal level, the systemic incentives are so screwed up that the end result is indistinguishable from what it would be if they all were only motivated by greed. So, if nothing else, let’s at least acknowledge our (indeed) privilege and be grateful that the universal lottery had us living here and now. And that while our co-pay for Novolog might seem high, for the moment most of us can at least afford it. Whether that will be the case in the future to a large extent depends on how deluded we choose to remain as a society.

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Very well stated, @Dessito! The free-marketeers love to expound about how this fantasy economic model is so good for the economy. In the case of the insulin market, it is anything but free. Economists label an economy where a few players corner an entire market, an oligopoply.

Wikipedia terms interdependence as one of the key features of an oligopoly. See if you recognize the current insulin market in the US.

Interdependence
The distinctive feature of an oligopoly is interdependence.[6] Oligopolies are typically composed of a few large firms. Each firm is so large that its actions affect market conditions. Therefore, the competing firms will be aware of a firm’s market actions and will respond appropriately. This means that in contemplating a market action, a firm must take into consideration the possible reactions of all competing firms and the firm’s countermoves.[7] It is very much like a game of chess, in which a player must anticipate a whole sequence of moves and countermoves in order to determine how to achieve his or her objectives; this is known as game theory. For example, an oligopoly considering a price reduction may wish to estimate the likelihood that competing firms would also lower their prices and possibly trigger a ruinous price war. Or if the firm is considering a price increase, it may want to know whether other firms will also increase prices or hold existing prices constant. This anticipation leads to price rigidity as firms will be only be willing to adjust their prices and quantity of output in accordance with a “price leader” in the market. This high degree of interdependence and need to be aware of what other firms are doing or might do is to be contrasted with lack of interdependence in other market structures. In a perfectly competitive (PC) market there is zero interdependence because no firm is large enough to affect market price. All firms in a PC market are price takers, as current market selling price can be followed predictably to maximize short-term profits.

People on the political right rail against any form of government regulation. How else can a society push back against abuses of the market such as one dominated by the corruption and collusion of out-of-control oligopolists?

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I really feel for those in the US or other countries that have to over pay for meds such as epi-pens and insulin. I am quite happy to live in a country that regulates how much big pharma can charge for meds. There are many people from the US that come here to Canada to purchase their meds because of the price difference. Here is a link that kind of helps to explain how Canada does it. http://www.pmprb-cepmb.gc.ca/about-us/frequently-asked-questions It would be great if the US had a system like this. For those that want to move to the Northwest Territories and become residents, your insulin and most diabetic supplies are free. Alberta offers free pumps to type 1’s replaceable every 5 years, but type 2 such am I still have to pay for them.

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I resent people like you that do not credit those of us in the US for supporting the cost of the research that makes these drug miracles possible. I note that Canadian funded pharmaceutical research has produced exactly ZERO drug treatments that I use to live a great life as a diabetic.

Hang in there, before long we won’t be providing price support for this research any more – that’s where this is headed. You can then kiss a cure goodbye, and consider current treatment modalities frozen forever.

Compare what nationalized health care governments spend on Pharma research to that spent by the private industry. Then start to think about where the funding for development of new drugs will come from when all the drug manufacturers can only afford to manufacture what they currently have in their portfoliio, since all their products are price-controlled at bare margins.

“Resent” seems harsh, but I stand by it. I’ll be 55 in February, so I have without a doubt paid directly out of my pocket for the development of drugs that you are using – on my dime. Why shouldn’t I be a bit resentful at the sort of attitude in your posting above?

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This is not fair.

I consider myself “on the right” (more libertarian than “conservative”, but’s getting into the weeds), and I most definitely support all sorts of government regulation, at Federal, State, and local levels.

The issue isn’t the simplistic characterization you make above, Terry. It is far more complex than that. It has to do with whether or not 1) the goal of regulation is worthy, 2) if the regulation will achieve the intended result, and 3) what are the costs in terms of “unintended consequences” that may result?

These are the primary issues concentrating my thinking when anyone proposes that the government step in and restrict another free citizen or citizens liberty. As one who believes strongly that freedom produces the best results most of the time for the most people, I’m very wary when people try to control other’s lives “for their own good”.

My objections to price controls on medications in the US have been made very clear, across many posts, over the years here. I find it a bit insulting to have those opinions summarized dismissively as, “[railing] against any form of government regulation”. It should be abundantly clear that, at least in the case of this conservative, that is patently false.

You may (and I think you do) disagree with my opinion that controlling prices in the US would kill R&D, and deny us future miracles. I respect that POV, honestly, I simply disagree with it, strongly, and like you, will respectfully express that POV.

I do not disagree with anyone that the prices we pay for drugs in the US are outrageous. The difference is, I don’t attribute it to greed as so many do, because I’ve looked in depth at the numbers, and it’s as obvious as the nose on my face that we’re subsidizing everyone else around the world who, when development costs are amortized in to the life of the drug – as they have to be.

Does a Dexcom sensor cost $60 to make? Of course not! Probably costs a few bucks, at most, materials and labor.

However, if we didn’t pay the difference, which constitutes recovery of R&D and other product generation costs, we simply would not have a Dexcom at all. Greed? Don’t be such a comedian. Dexcom still has never turned a profit. No one’s getting rich on G4’s and G5’s. But a lot of us – you especially – are benefiting enormously from it. Loop would not be possible without it. And you wouldn’t have it without $60 sensors, $1000 transmitters, and $500 receivers.

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I, for one, am indebted to three Canadians, Banting, Best, and Collip, who sold their patent on insulin for the grand total of $1 CD apiece to the University of Toronto in 1923.

I’ve not done this research but I’d love to know how much money Eli Lilly has spent on research for its rapid acting analog insulin, Humalog, since it was introduced 20 years ago in 1996.

Edited to correct date from 2006 to 1996.

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I’d like to add the reason I am so passionate about this (and I am, very) is I see us hurtling toward a “kill the goose that lays the golden egg” scenario, and it looks to be getting more and more likely.

I’d like a cure for diabetes. Short of that, I’d like better treatments – much better. Treatments that make diabetes effectively no more of a life-impacting problem than needing glasses. Things like smart insulins that you inject once a week, then forget you’re a diabetic and just live. Or innovations we can’t even conceive of right now.

IN MY OPINION we will not get these things if we have to rely on the public sector to discover them. When faced with spending for a prospective future vs. addressing problems right now demanding money, when in human history have people voted to suffer now for something that might or might not yield benefit in the future?

They don’t. That’s why virtually all the funding for drug R&D – regardless of what country the company is based in – comes from drug sales in the US, the last place on the planet companies can recover development costs. Keep that in mind – none of the socialized health care systems are providing any meaningful function for research and development. This very thread exposes that. Take away the huge margins in the US, and R&D shuts down.

Drug price regulation? I’m for it! But the only people that would be happy are US patients, as the regulation I have in mind is setting global prices, based on socially agreeable profit margins (generally this is around 10% gross), and fully amortized R&D pipeline funding.

The problem is not greedy Big Pharma. The problem is greedy people around the world that want things for free. Since “free” doesn’t exist, it really amounts to greedy people wanting others to pay for the actual cost of their treatments.

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Do you have reason to believe there is anything dishonest or untoward in those figures?

Judging by Lilly’s overall financials, they’re not getting away with anything. This is the main source of my pushback on all the “greedy Pharma” claims… where’s the beef?

The most profitable drug manufacturers run around 30% gross margin, which is a lot, but not outrageous. In line with the tech industry, for example. Way out of line compared to other “need” industries like food/groceries. So there’s an argument there is some excess there.

However, dialing those profits back to around 10% wouldn’t change the R&D costs, which make up the bulk of the pricing of most drugs in the US. So, unless everyone else outside the US starts paying more for drugs – and from their perspective, A LOT more, lie 200-300% what they currently play – completely eliminating profit from drug prices in the US would not lower prices very much.

You want US prices to go down dramatically? There are only two ways: Customers outside the US start paying a lot more, or drug companies stop doing R&D.

If you (or anyone else reading) has another idea for how to drop US prices to the levels Canadians are paying without killing the R&D in these companies, please explain. I certainly don’t argue for $250/vial insulin because I think that’s just such a cool thing to pay. If there is a solution where Humalog can be $30/vial worldwide, and Lilly can still fund their R&D pipeline, I want to hear about it. If it’s viable, I’ll get behind it.

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I also support the cost of research with my purchases of medications. Oh and by the way insulin that is delivered outside of the pancreas was a development by a Canadian. The price of that research is so high because maybe the US has accepted that they must pay that high price. If the US started paying less by price caps do you think the research would stop. No. It will continue, but instead of the pharma executives having four jet engines on their plane they will have three. They WILL develop ways of doing it cheaper.How much is a drug worth. As much as you are willing to pay. Don’t resent me because my gov decided that I should be able to afford the drug so I can have it.

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BS Dave. Those are the same kinds be of accounting gimmicks that say planned prenthood is an NPO etc

You don’t go from zero to a multi hundred billion dollar industry (with relatively minimal advancements in technology along the way) without excess profit taking.

I, for one, blame my fellow American diabetics for allowing this to happen. Blindly and absolutely refusing to consider the costs of something (beyond complaining in the abstract) as they are escalating out of control just because “someone else is paying for it” is pretty much the sole reason insulin costs have spiraled to the point of absurdity in this country. Meanwhile a vial of R is $25… but as long as someone else pays we will gladly take the $1000 vial of slightly better humalog… and we can’t figure out why the costs are on a ridiculous upward trajectory…

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Or you could make R&D cheaper, which has a lot to do with both FDA regulation and what I would consider outdated and not-very-innovative systems for drug discovery.

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@Sam19, I’m struggling to understand how you would expect type 1 diabetes who rely on insulin who come from all manner of socioeconomic backgrounds, education levels and levels of medical knowledge, to go against what their doctor has prescribed for them and decide on their own dosing regimen using over-the-counter Walmart insulin as a protest against price gouging, against a price that they may never even see. Most T1Ds don’t even adjust their dosing regimens/pump settings without their endo’s say-so, and most people around the world don’t and can’t do extensive research into whatever drugs they’re taking before they use them. It’s absurdly unrealistic to expect this level of research for most people.
By the way, just like Affrezza provided, in clinical trials, no improvement in hard measures such as A1C, but did dramatically improve quality-of-life, I’d imagine those who used R and NPH would argue that, sure, they could theoretically get the same A1C on those drugs, but that their quality of life would be markedly worse.

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Honestly, I think right now this is not the most productive discussion to have on TuD. Many millions of people are incredibly fearful that they will lose their coverage for chronic medical conditions due to the current political situation, and whether you think there is a real chance of that happening or not, I think nerves are very raw as a result.
I know that this kind of discussion, which ordinarily would seem to be an interesting theoretical discussion, now strikes me very differently.

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You are right, and I’m just as much a hypocrite as every other American in that regard… but that’s all just indicative of the problem itself… that when there is no “real” consideration of the costs (including by me), they will surely rise forever and disproportionately-- what else would they do? I don’t know the solution but I firmly believe I do recognize the problem.