Auf Wiedersehen Humalog, Hello Regular

Back in June, Eli Lilly & Company announced a deal with Wal-Mart stores (and with unusual fanfare for the company, I might add) that its Humulin insulin would be replacing Novo Nordisk's Novolin in a co-branding deal that makes it the exclusive insulin supplier for the giant retailer's ReliOn brand of diabetes care products.

Rival Novo Nordisk had been the ReliOn insulin supplier for nearly a decade, since a deal was signed with the Danish insulin manufacturer in the summer of 2000 (see HERE for some background on that).

Dow Jones Newswires reported that the move did not appear to be tied to Wal-Mart's stepped-up "rollback" strategy in which the retailer is vigorously cutting prices on many items. Lilly spokesman J. Scott Macgregor told Dow Jones that Wal-Mart would actually be setting the price but hadn't done so yet, although he indicated that Lilly believes the cost will be comparable to the current ReliOn insulin offering. But today, 90-95% of all drugs are paid for by Pharmacy benefit manager (PBM) companies, and increasingly, PBMs are pushing clients to use mail-order pharmacies they actually run, not retail pharmacies, so one might legitimately question just how much in sales the the Wal-Mart deal will actually deliver for Lilly.

Although many companies might regard an exclusivity deal with the nation's (and the world's) largest retailer as a business coup d'état, closer examination suggests that the move is probably more indicative of just far Lilly's fortunes in the U.S. insulin market have fallen. Presumably, the company is making a small margin on Humulin that will be sold under the ReliOn brand, but in order to unseat Novo, it likely meant that Lilly had to give a more generous pricing discount and/or some other incentives to lure the Walmart business from its global insulin rival.

It's almost a quaint memory that back in the 1980's, Lilly commanded as much as 85% of the U.S. insulin market. Enormous changes in how insulin is marketed have taken place since Lilly's former insulin glory days. In fact, the Lilly diabetes care business (aside from the healthy Byetta marketing deal with Amylin Pharmaceuticals) had fallen so precipitously that last September, Lilly CEO John Lechleiter reorganized the company and finally made diabetes care a line of business that reports directly to him as CEO. The man named to the role of President of the Lilly Diabetes business was Enrique Conterno, who also remains a Senior Vice President with the corporation. Mr. Conterno is not a scientist, but a businessman, which is unusual in a company full of chemists, biologists, doctors, pharmacists and lawyers. At the same time, Lilly eliminated it's neuroscience business unit altogether, the same business unit that created Prozac, which is now widely prescribed as a generic drug. To say this was a radical shift in company strategy (and fortunes) is indeed an understatement. Mr. Conterno has his work cut out for him.

How Lilly Lost It's Leadership In U.S. Insulin Market

Historically, the U.S. pharmaceutical distribution system consisted primarily of two parties involved in decision-making: the doctor and the pharmaceutical drug manufacturer (drug companies also relied on retail outlets that sold and distributed the drugs). But decisions about drug purchases (including insulin) were usually made by doctors, whose biggest concern was to prescribe the most effective and safe medicine for their patients. Also, few diabetes patients were eager to alter a treatment protocol that already works well for them, and really, who could blame them?

But by the 1990's, managed care organizations had radically altered the U.S. pharmaceutical procurement business model. Today, preferred provider organizations (PPO), health maintenance organizations (HMO), other managed care providers and in some cases, the few remaining traditional health indemnity insurance plans -- in other words, the payers -- now routinely steer patients towards certain formulary drugs which helps to control one element of healthcare costs. PBMs (notably, Medco Health, CVS Caremark and Express Scripts), who manage the pharmaceutical benefits for large customers and/or payers typically encourage the use of less expensive alternatives to branded drugs whenever available, and use various pricing mechanisms (including tiered co-payments favoring fomulary drugs, or in some cases, complete elimination of co-payments on generics) to steer patients to use "preferred" brands of many different therapeutics. In fact, increasingly, non-formulary brands may not even be covered by healthcare plans under any circumstances.

Novo Nordisk has always been quite adept at negotiating prices for national insurance plans in most of Europe, and took that ability to identify key decision-makers among healthcare providers in the U.S. By 2005, Novo Nordisk had managed to unseat longtime rival Lilly (see HERE for details) and stated it's aspirations to increase it's share of the U.S. market even further.

According to sales statistics compiled by IMS Health, around 2005, all three of the primary insulin suppliers in the U.S. (Lilly, Novo Nordisk and Sanofi Aventis) each had roughly the same share of the insulin analogue market, each with with about one-third of the market. In the past 5 years, while Sanofi Aventis' share has been pretty much unchanged, Lilly's share has fallen to approximately 22%. The beneficiary of Lilly's market share loss: Novo Nordisk, since Sanofi's share hasn't moved.



While there are a number of different reasons behind this shift, a key factor has been a rationalization by healthcare providers of the number of suppliers they wish to work with. If a single supplier can provide a number of different treatments for a number of conditions, chances are the collective price for all of these will be lower with the added benefit of not having to negotiate contracts with multiple suppliers. But when it comes to insulin, Lilly is resting on innovations the company created decades ago and no longer even sells a basal insulin, effectively forcing patient to buy those products from its rivals. Today, unlike Novo Nordisk and Sanofi Aventis, Lilly doesn't even offer a full portfolio of insulin analogues, although it now tells investors it is developing one, that's unlikely to emerge for years to come.

An Encore Performance?

As I've noted, in the last 5 years, my employer has switched insurance companies 3 times. Perhaps insurance companies have adopted a practice used by banks and credit card companies with special "introductory pricing" followed by dramatic price increases. Whatever the reason, I have been with United Healthcare, WellPoint/Anthem and most recently, a comparatively small New York-based insurance provider named EmblemHealth. Based on my experience, I found United Healthcare to be my favorite, but without the buying power of a large corporation, many smaller employers like mine must struggle to deal with runaway healthcare costs. Until healthcare reform facilitates state-based American Health Benefit Exchanges and Small Business Health Options Program (SHOP) Exchanges to be administered by a governmental agency or non-profit organization through which individuals and small businesses with up to 100 employees can purchase qualified coverage in 2014, short of changing employers, there is a risk that the healthcare insurer shell-game could happen again because smaller buyers simply cannot get the same kinds of deals on insurance that larger companies can. That's a reality.

I switched endos when my previous endo wasn't on WellPoint's PPO list, but I drew the line on switching again a year later when my employer then switched to EmblemHealth. Instead, I utilized the out-of-network coverage benefit in the plan, which enabled me to stick with the first endo I've had in a number of years that I actually like. He's great, and was the winner of the American Diabetes Association's 2009 "Outstanding Physician Clinician in Diabetes" award: Dr. Daniel Lorber (see HERE for the press release on his award, which now graces the lobby of his office). But he's well aware of the B.S. insurance companies put patients through, and in a previous conversation with him, he lamented how medical doctors' recommendations are too frequently disintermediated by bean-counters at insurance companies who have no training in medicine, but we both acknowledged that things could be worse. In some parts of the world, they are much worse, and patients die from lack of access to life-saving medicines like insulin. I cannot help but wonder if in their afterlives, they end up in the U.S. healthcare system and then have a new set of frustrations that ends up killing them? Karma can be strange that way.

Dear Patient: We're Changing Our Fomulary Based Upon A Careful Review ... Of Our Bottom Line!

Prior to my last appointment with Dr. Lorber, I received a letter from my healthcare insurance provider that looked eerily familiar (I had seen almost the exact same letter from United Healthcare a few years ago, and also from WellPoint ) -- in fact, most of the letter's contents was probably the same regardless of which company sent it. Have a look at the letter HERE:




I find this form-letter a tad amusing when it describes what EmblemHealth calls it's plan to begin using a "step-protocol". Obviously, the bean-counters who drafted this letter are clueless because when it says that doctors must prescribe a GENERIC (hello ... I've been asking where biosimilar generics are for like 5 years now, see HERE and HERE for some background -- the fact is that today, there is no such thing as generic insulin -- @$$#0le bean-counters) or first-line medicine before a second-line medicine can or will be approved. Hello, there are no f'ing generic insulins; they should have known this!

We all know what's going on here.

The insurance company can use flowery language to say they're changing the formulary based upon a careful review of a drug's effectiveness by doctors and pharmacists ... blah blah blah, but who the hell do they thing they're kidding? Novo cut them a deal, and it's now a lot cheaper for them to buy Novo insulins than it is for them to buy Lilly insulins. One need not be an MIT Economics Professor to figure that much out. But I've already tried Novo insulin when United Healthcare switched to Novo. Novolog, based on my personal experience, deserves to be called "Slow-Mo-Log" (meaning it works in slow-motion, or if you prefer, "No-Go-Log") -- it can NOT even be called rapid by any stretch of the imagination, no matter how the company is spinning it's PR web. My experience was that Novolin R was just as fast, plus had the added benefit of not requiring a doctor's prescription and to top things off, it sells for less than half the price!

The irony here is that although EmblemHealth is not removing Humalog from the formulary altogether, the company does not have an alternative the way both United Healthcare and WellPoint did. When United Healthcare did this, if you couldn't use Slow-Mo-Log, you had the option to switch to Sanofi Aventis' Apidra instead. But EmblemHealth does not have an alternative, so I cannot help but wonder how many calls their Clinical Pharmacy Services department will be getting come October 1, 2010? I suspect that if Apidra were available, they'd only get a few calls, but since it's not, it's really anyone's guess.

In the meantime, this also tells me that Lilly and its salesmen/women aren't doing their jobs. In addition to losing huge accounts, they are now losing smaller accounts like EmblemHealth as well. But I cannot fix Lilly's problems, Mr. Conterno has to do that, and he needs to start by getting his insulins on many, many, many formularies that have dumped Lilly insulins during the past few years (and there are many who have, I've been insured by 3 of them). Doing so is going to cost them (and giving up it's fat margins has been something Lilly has so far been unwilling to do) but as Wall Street analysts are fond of pointing out, the company is about to fall off a patent cliff, so something needs to be done soon.

In the interim, I would suggest Lilly start deploying staff who can prepare responses to insurance company denial letters for patients, because that seems to be an all-too-common occurence these days. At least that might help patients continue with Lilly insulin if they prefer to do so.

In may last appointment, I told my endo that under no circumstances would I be switching to Slow-Mo-Log, and that my preference was to switch to Regular for the reasons I already mentioned. Many endos would flip out if a patient said that, but not mine. In a manner that has made him my favorite endo in a long time, his response was: "You know this disease better than anyone (including me). If you need me to try and appeal this for or with you, just leave me a copy of the letter and at your next appointment (in September), we'll see what we can do."

All I can say is thanks, Dr. Lorber ... the world needs more endos like you!!

Tuesday Miscellany

It's been a while since I've had the luxury of spare time to post much on my blog, and believe it or not, I'm still editing and working on my summary of the Social Media Summit held in late June through early July in Orlando, so I'll just leave it at that for now. But, there are a few noteworthy diabetes-related tidbids that I felt were worth sharing with my readers, so without further delay, here they are:

Upcoming FDA Deadlines on New Insulins

My readers may recall that in January of this year, I kicked off the New Year with an extensive article about some rather significant changes looming for the U.S. insulin market, which is badly in need of both innovation and competition on prices and quality, so let the competition begin!!

As I write this post, two companies (Biodel Inc's VIAject and MannKind Corp's Afrezza inhalable insulin) mentioned in my January article have already submitted new drug applications (NDAs) or abbreviated new drug application (ANDAs) for insulin are now awaiting approval or denial decisions from the U.S. Food and Drug Administration (FDA). U.S. law mandates under the Prescription Drug User Fee Act (PDUFA) that was passed into law in 1992 that the FDA is required by law to act on new (or abbreviated new) drug applications within 180 days. Of course, if an application is incomplete or there are any questions about an application, the stopwatch does not actually begin to countdown until all of those issues are completely resolved. This was the case with MannKind's Afrezza inhalable insulin (see here for more background), whose NDA was delayed slightly by some questions on the new drug application for Afrezza and the inhaler device. Specifically, MannKind conducted clinical trials using one version of the inhaler but was seeking approval for marketing a modified version of the device. Investors remain a bit spooked by the prospects for Afrezza given the Exubera debacle (see here for some background on that), and critics argued that was a very amateurish mistake that MannKind could have avoided with better preparation. Regardless, it should also be noted that the 180 day timeframe is a deadline for the FDA to actually ACT on an NDA, not necessarily render an approval or denial on a drug. However, the FDA has historically told applicants when they are likely to expect an approval or denial decision in a "complete response letter" given at some point following acceptance of the new drug application. Many (if not all) Wall Street investment analysts watch carefully for clues on the so-called PDUFA dates in order to assess the outlook for new drug sales and the revenue streams associated with them, and can therefore give guidance to investors on pharmaceutical and biotech company stock valuations. As of yesterday, we now have PDUFA dates for BOTH new insulins being reviewed, and they're quite literally right around the corner!

Biodel's VIAjectLinjeta: FDA PDUFA Date on October 30, 2010

I should note that on September 2, 2010, Biodel, Inc. announced that the company was abandoning the registered trademark of VIAject and renaming it Linjeta (see here for more background). I can only guess on the reasons or logic behind that decision, but just be aware that the terms VIAject and Linjeta are used interchangeably here, but the brand to be used will be Linjeta.

Biodel, Inc's ANDA for VIAject was submitted to the FDA on December 30, 2009. On January 14, 2010 at the 25th Annual JPMorgan Annual Healthcare Conference in San Francisco, Biodel indicated that the PDUFA date for VIAject was anticipated to be on October 30, 2010 (see here and reference slide 25 which is on page 26 for complete details). Note that because October 30, 2010 is a Saturday, it could come on Friday October 29, 2010, or more likely on Monday, November 1, 2010, although the actual date is unlikely to have any impact on the outlook for the company's stock. In the subsequent quarterly earnings presentations from Biodel, there has been no mention that the PDUFA date had changed, nor were there any unresolved questions from FDA reviewers. That's largely because the company delayed its application for VIAject until the outstanding questions on it's clinical trial results in India were completely resolved, otherwise it would the company would have submitted the ANDA sooner. But Solomon Steiner, who was the CEO (he's stepped down to become full-time Chief Scientific Officer, which is really his core expertise anyway) knows very well how the FDA works, so the company had wrapped up any possible questions before submitting the application. The NDA even includes references to an insulin pen, although as the presentation notes, the NDA will be supplemented for both an Owen Mumford pen device (Own Mumford is a UK-based company that designs and manufactures a range of different medical devices and disposables used by healthcare professionals and consumers worldwide, and already sells insulin pen needles approved and markted in the U.S. and Canada today) for a refillable pen that accepts VIAject insulin cartridges, and a disposable pen that is from an Indian based biopharmaceutical company with a large presence in the UK thanks to it's acquisition of UK insulin manufacturer CP Pharmaceuticals, Wockhardt Ltd. will supply them with disposable pens, but assuming VIAject is approved, will likely be rolled out after it is approved. The disposable device is referenced on slide #27 (which is page 28) of the JPMorgan presentation above.

MannKind's Afrezza: FDA PDUFA Date on December 29, 2010

Afrezza is fundamentally different from VIAject because it is not subcutaneously injected, but inhaled through the lungs. That also means it cannot apply using an ANDA because it is more than slight modifications to a generally recognized as safe molecule, therefore it is an NDA just like any brand new drug. Because it is completely new way of delivering insulin, and the company's "Dreamboat" inhaler is not even the device referenced in the NDA submitted to the FDA, but a second-generation device. Some industry consultants have called that a very amateurish mistake, because more experienced drug, biotech and medical device companies would have undoubtedly ensured that device modifications would be done after the drug already had an FDA approval. Regardless, MannKind remains bullish on Afrezza even if analysts on Wall Street, the medical profession and even patients with insulin-requiring diabetes are somewhat less enthusiastic. While some patients may indeed find this delivery method more attractive, but ensuring Medicare coverage is likely to be critical in the success of reaching insulin naïve type 2 patients and their doctors who can (and too frequently do) delay initiating insulin into their diabetes-care regimens, so MannKind has its work cut out for it.

In any event, MannKind investors been somewhat uncertain about the what the PDUFA deadline for Afrezza would end up being since there were some early delays on the NDA itself which the company was working to resolve earlier this year. In MannKind's Monday's Q2 Earnings Presentation, that question was finally answered (see here for the transcript). Chief Financial Officer Hakan Edstrom told investors that Afrezza's NDA was given a December 29, 2010 PDUFA date. Will patients with diabetes be celebrating the new year with Afrezza? Although insulin-sensitive type 1 patients may still find refining dosages more difficult with Afrezza than they can accomplish via subcutaneous infusion (with an insulin pump), this product still has potential to change the way mealtime insulin is dosed for many and could encourage more type 2s who may be avoiding mealtime insulin to consider it, plus the speed into the actual bloodstream promises to be faster than current rapid-acting insulin analogues, albiet only by a few minutes based on company data. To use Amy Tenderich's expression whether MannKind's Afrezza Dreamboat inhaler is a blockbuster in waiting or another looming shipwreck (à la Exubera) remains to be seen, but we could see clues as soon as January 2011, so stay tuned for more!

#DSMA Weekly Chat on Twitter using TweetChat.com

No doubt, my readers may have seen my Tweets (posts on the social network Twitter) which are on display in the right-hand margin of my blog. Initially, I grabbed my "sstrumello" login on Twitter to ensure no one else took it, but it took me a bit longer to start using it. But since I became a Twitter member, I think it has become abundantly clear that Twitter is no longer exclusively about micro-sized (140 characters -- including spaces -- or less) posts that can be done via text (SMS) messages from almost any mobile phone, on the web, or using any of the countless applications that exist to help users keep track of all their social media contacts. But that's not the real beauty of this particular social media channel, it's that there's really a non-stop conversation pretty much 24/7/365 on topics of interest, as people really can chat using their mobile devices or PC. Once again, diabetes has a very well-established footprint (or are they bird-prints since Twitter's logo is represented by a bird that "tweets"?) on this space, and many of the names also present in the blogosphere and on Facebook are on Twitter, too -- usually on all of the above social media venues (blogs, Facebook and Twitter). I have retained the "sstrumello" brand on my blog, as well as on Facebook and Twitter, incidentally, and you may also recognize that most others have the same or very-similar sounding user names.

More recently, the Twitter #DSMA chats have taken on a bit more structure, at least once a week for an hour or so. Cherise Shockley (a.k.a. @Diabetic_Iz_Me on Twitter) has for the last few weeks kind of pioneered doing scheduled weekly diabetes-related chats on Twitter. Unlike online chats that occur on DiabetesTalkFest.com which is now the The Diabetes Resource chatroom, in which a guest is usually pre-scheduled and participants may ask questions or give comments to the guest "star" of the chat, these are really much more open-forum discussions. I don't see this as a threat to the DiabetesTalkFest-style of chats, which are somewhat less frequent and more structured in nature, as it seems unlikely that prominent diabetes researchers will join these chats, although I guess one never knows. But the real beauty is that because people can do them from their mobile devices, participation is less dependent on someone seated in front of their computers. The conversation moves very fast, and these have become a happening place to be on Wednesday evenings at 9:00 PM EST (6:00 PM PST), especially since we're in the middle of re-runs of stupid reality TV shows and the like on television until the new season begins after Labor Day.

How To Join The Party

Cherise has assumed the identity of #DSMA (an acronym for "diabetes social media advocacy" represented by the Twitter ID "DiabetesSocMed") to organize this weekly event, and usually has a handful of discussion topics that participants chat about. These occur every Wednesday at 9:00 PM EST and are designated with the #dsma tag. A sneak peek of this week's topic du jour is: insulin/T-2's and experimental treatments. Let me go on the record as saying these are very active and lively chats, and definitely worth checking out!!

Now, Twitter has spawned a host of ancillary applications including web-address shortening applications (including bit.ly and tinyurl.com just to name two of the more popular ones, although The New York Times now has it's own designated "short" URLs designated with "nyti.ms", whereas Huffington Post uses "huff.to" and Medical News Today uses "mnt.to", but as I understand it, all use bit.ly's underlying technology) which effectively shrinks long URLs to fit conveniently within the 140 character limit imposed by Twitter.

There are also desktop, web and mobile-phone applications (I have been using yoonoo.com which is a desktop application), but there are also web-based applications such as brizzly.com or friendfeed.com, and mobile phone-based applications like tweetdeck.com) that help to keep track of all these different social media memberships in a single location/application (I call them "consolidator" applications) and with a primary login, you simply need to enable the anciallary applications to access your Twitter login and password. Truth be told, most people use these consolidator applications because it becomes a big hassle otherwise.

Indeed, Twitter's anciallary applications (designed by other developers to work with Twitter) are growing as rapidly as Twitter itself. One anciallary application that is quite useful is TweetChat.com, which in it's own description, "... helps put your blinders on to the Twitter-sphere while you monitor and chat about a hashtagged topic" (FYI, the hashtag or "#" is used to group posts made on Twitter that reference the same subject more easily, whereas the "@" symbol is used to reference the original poster, such as when you re-tweet them (which is preceded by "RT"). The TweetChat function has some nifty features, such as eliminating the need to add #dsma after Tweets made in the chatroom by doing it automatcally and only listing posts made with the same hashtag, and also the ability speed up (or as is more often the case, slow down) the refresh rate of new chatroom posts.

Cherise has also done a fantastic job by creating a website where you can catch the transcripts of past chats which can be caught at http://diabetessocmed.com/.

Just so everyone's clear: the chat organizer is designated with "@DiabetesSocMed" and right now, Cherise has gotten the ball rolling on this. All you need is a Twitter user name, although the chats are best done from an anciallary application called TweetChat.com, you can login to that application using your already-established Twitter login and password. But the TweetChat application's main page will help you through the process if you don't. The direct (I fooled you with this one, which is underlined, but isn't a link) link to this room is as follows:

http://tweetchat.com/room/dsma

Now, if you already have a Twitter user ID and password, that makes your job a bit easier, and I find it easiest to just login to Twitter in one window, and then visit the TweetChat.com site in another window (or "tab" in Microsoft's Internet Explorer or Mozilla's Firefox web-browsers). My consolidator application Yoono.com makes that as simple as pushing a button. If you already have a Twitter ID and password, and go to the TweetChat website, you just click on the "Sign In" button and will then be taken to a page that says "An application would like to connect to your account, and more some more detail indicating "The application TweetChat by would like the ability to access and update your data on Twitter. This application plans to use Twitter for logging you in in the future." Where it asks you if you want to "Allow TweetChat access?" you should select the "Allow" button, which will then log you into the TweetChat application. You then enter the chat "room" in the box that is preceded by the "#" (known as the hashtag) and to enter the DSMA chatroom, you simply enter "DSMA" in the box and press the "Go >>" button. All of your Tweets will then be posted to Twitter automatically and will be designated with the #DSMA hashtag, plus you can reply to specific comments or re-Tweet comments from others, and most importantly, slow down the "refresh rate" to enable you to actually read and follow the conversation at a speed that works for you (that depends on how many people are in the #DSMA chatroom and Tweeting their thoughts at a given moment).

Anyway, that's all for today. I hope I've made that reasonably clear for anyone who might be interested in this stuff. Stay tuned for more of what you came her for!