Tuesday, December 31, 2013

Little-Noticed Diabetes Care Developments of 2013

As we approach the new year (2014!), although I haven't blogged as much as I did a number of years ago, there were a few things which, in my opinion, deserve acknowledgement as they relate to diabetes care.  One of the biggest (perhaps), yet less acknowledged, developments was mergers and acquisitions in the diabetes care space.  Although I follow this stuff, sometimes even I lose track of who acquired who and what their new names are (when they change the name of the company).

Bristol Myers Squibb: In Again, Out Again (... Of Diabetes Care, That Is).  Novo's Danish Delusions.

My readers may recall that last year (see http://on.wsj.com/Kh9xic for details), San Diego-based Amylin Pharmaceuticals was acquired by the pharma giant Bristol Myers Squibb (BMY), a company that was (after Eli Lilly & Co.) once the second-largest American drug company to sell insulin in the U.S. (in those days, it was sold under the E.R. Squibb & Sons, Inc. brand name and did so until the mid-1970s).  Various mergers and acquisitions (including Squibb's being acquired by Bristol Myers in 1989) over the years and production problems led the company to turn to a largely unknown (to Americans and Canadians) Danish company known as Novo Nordisk A/S to supply insulin through a joint venture which relied on Squibb's American salespeople to merchandise the product, and Novo's manufacturing sold by a joint venture known as Squibb/Novo, Inc. until 1989, at which point, Bristol Myers Squibb executives sold the company's share of the joint venture to Novo Nordisk outright and exited the U.S. insulin market completely.  I should note that 1989 was also the year that two separate, Danish rival insulin manufacturers merged to form Novo Nordisk A/S, previously Novo and Nordisk were independent entities.  Novo did see sales grow with the joint venture, hence the acquisition established the company as a viable competitor in the U.S. insulin market whereas the company was almost completely unknown to North Americans prior to the 1980s.  However, insulin pens didn't propel the company to become a major player as it did in Europe, its ability to navigate the managed care environment and sell itself to the formulary managers did.  Ironically, Diabetic Investor David Kliff thinks Novo Nordisk management is na├»ve to think its products are immune from competition (see http://onforb.es/JIsWbo for his write-up).  I will say that in addition to losing Express Scripts and Kaiser Permanente this year, the company has also seen a newly-aggressive Lilly grab more market share during the past few years, whereas Lilly had let its diabetes business slide previously.

Novo Nordisk followed a somewhat similar strategy in Canada.  The Canadian government under Prime Minister Brian Mulroney liquidated the birthplace of insulin, Connaught Laboratories, Ltd. around the same time, although I believe it was sold to what was then Aventis (now Sanofi) because by that time, Novo had already established its own manufacturing facility in Canada.  BMY, on the other hand, had pretty much avoided diabetes treatments (for type 1 or type 2) until more than a decade later when it bought Amylin.

In any event, BMY re-emerged as a player in the diabetes space when it acquired Amylin.  I should note that the company's CEO left the company to run Israel-based drug giant Teva (best known for generics) for a bigger paycheck, only to leave a few months later after a disagreement with someone on the board of directors.  He and the rest of Teva's management team see opportunity in proprietary, patent-protected drugs rather than simply competing with low-price generics companies (several from India) as well as others like Perrigo (headquartered in Michigan, more on them later) which just closed on Elan, a big Ireland-based generics manufacturer (see http://prn.to/1bQBMOh for details).  Rival BMY moved in a different direction when it comes to diabetes.

AstraZeneca: A Newer Player In Diabetes Care, But Now A Pretty Big One

Without getting too far off-topic, the irony is that BMY had decided less than a year after acquiring Amylin, to sell its diabetes business as a whole to AstraZeneca (a.k.a. "AZ", which was a joint venture partner to market products like Symlin and Byetta in Europe) which seemed a tad like deja vu for long-timers who remember the days when Novo Nordisk had absolutely no brand recognition in the U.S.  AZ is kind of unknown in the U.S. diabetes market, much as Novo Nordisk was in the 1980s, but it cannot be discounted.

AstraZeneca, itself the result of a 1993 merger between Sweden's Astra Pharmaceuticals and the larger UK rival Zeneca Group plc, is kind of struggling these days with a number of patent expirations, and relatively few likely drug prospects in its own development pipeline.  The acquisition gives it sales and a few likely drug approvals in the coming years.  AZ had an autoimmunity treatment (which it was working with a Cambridge, MA startup known as Tolerx) for type 1 diabetes in its pipeline which failed in clinical trials (see the news at http://bit.ly/1fWjexj), and many of the company's other products are no longer patent protected.  It has seen its share in the Type 2 GLP-1 receptor agonists, which mimic the effect of glucagonlike peptide- 1 space (Byetta) shrink as Novo's Victoza has grabbed a bigger slice, but there are expectations that its extended release version to be known as Bydureon could reverse that in the not-too-distant future.  Also, Novo Nordisk lost the massive Express Scripts PBM account, which may favor AZ.  AZ needed the diabetes business more than BMY did, although I question whether the company can effectively manage the business, though it certainly has every incentive to make it work.

Teva Could Emerge As a Bigger Player in Diabetes than AstraZeneca in the Future

Teva already sells a number of type 2 generics, but its also one of the few (aside from Novartis' Sandoz unit) companies that could emerge as a major biosimilar manufacturer (although Lilly is already discussing a new-and-improved version of Sanofi's Lantus whose patent is due to expire in a about a year).  Aside from that, the company has licensed the rights to one of the few autoimmunity treatments that hasn't [yet] failed in clinical trials (Diapep 277), which its licensed from another Israeli company known as Andromeda (see my post HERE for background).  Of note is the fact that on December 18, 2013, Andromeda announced that the first patient had been dosed with DiaPep277 for the treatment of type 1 diabetes in its Extension Study to the Phase 3 Clinical Trial known as DIA-AID 2.  The 24-month extension study is designed to evaluate long-term safety, tolerability, and the effect of DiaPep277 on the ability of patients to maintain glycemic control for 2 additional years following the completion of the DIA-AID 2 confirmatory study. DIA-AID 2 is scheduled to be completed at the end of 2014, and is being conducted in medical centers in the USA, Europe, and Israel.  Catch my Tweet on that below, or HERE.

Nipro Diabetes Care: You May Not Know Them, But You May Know Them Soon (or at least you'll know their products)

My readers may recall that a few years ago, I wrote about Nipro Diabetes Care (see my post HERE).  In hindsight, my write-up wasn't terribly flattering (to Nipro), but my perspective was that Walmart Stores, Inc. was getting big price breaks from its new supplier (Nipro), but wasn't passing the savings on to consumers.  However, on my most recent visit to Walmart, the company had cut the prices for its liquid glucose products by $0.20.  Thanks Walmart, better late than never, especially for a company whose Q4 2013 sales are likely to disappoint institutional investors, and you wonder why?  In any event, a Nipro made a little-noticed but pretty big move that deserves to be acknowledged here.  My readers may recall that in January 2013, Perrigo acquired CanAm Care (see the press release at http://prn.to/1doc59j).  They are a big supplier of store-branded lancets and glucose tablets, although it also sells glucose tablets and liquids under the Dex4 brand name.  In any event, my longtime readers may recall that I disclosed that CanAm care relied upon a small, privately-held New Hampshire based company known as P.J. Noyes Company (I wrote about it HERE) to make its glucose tablets and bottle its Dex4 Liquid Blast liquid glucose treatments.  As it turns out, in August 2013, rival Nipro Diabetes Care acquired P.J. Noyes (see the Businesswire press release of the acquisition at http://bit.ly/1dodRai) the contract manufacturing company CanAm users to make these things.

Not only did Nipro snag the massive Walmart account from Perrigo, but it also acquired the very company that contract-manufactures its glucose tablets and liquids!  This undoubtedly puts Perrigo's CanAm Care unit in a rather uncomfortable position.  As part of a bigger drug manufacturer, CanAm can theoretically bring production in-house, but it may not have the ability to do everything right now, and the company is very busy digesting its big Elan acquisition (the company which is headquartered in Michigan, but is now legally based in Ireland thanks to tax benefits), so the company to watch in this space is (for the moment), Nipro, although as I wrote way back in 2006 (see my post HERE) there are other players such as New Jersey-based Raritan Pharmaceuticals which might step in given the change-in-hands seen at P.J. Noyes.

Time will tell.

However, we have seen Nipro make some subtle changes (a number for the better), such as removing less popular flavors from the bottles of glucose tablets that patients aren't complaining about, removing the inner seal to the glucose liquids to make them easier to open, so this development could be an interesting one.  I would expect to see Perrigo to be more aggressive to try and retain its share of the lucrative private-label business (sold under the pharmacies' brand names), but whether this translates to savings for patients remains to be seen.  However, Nipro did switch to shorter bottles for its glucose liquids that resemble energy (caffeine) shots so as to be less conspicuous.  They also lack an inner seal making them easier to open (good news if your hands are shaking from hypoglycemia), so it seems CEO Scott Verner is bringing innovation to what had largely become a commodity market.  The Orlando Sun-Sentinel had a fascinating article about some of the things Nipro has done under Mr. Verner's leadership (see the article at http://ow.ly/sbqVu) which you might want to have a look at.

Beyond this, 2013 brought several other changes.

Without question, the Affordable Care Act (a.k.a. "Obamacare") will profoundly impact people with diabetes in 2014, and ways that have yet to be appreciated.  While some segments of the population and the media outlets that cater to those viewpoints have been only too quick to declare it a failure before it began, the reality is this law was the first fundamental change to overtly discriminatory practices which enabled healthcare insurance companies to basically cherry-pick the youngest and most healthy individuals, while simultaneously enabling them to refuse to sell (at any price) policies to people with so-called pre-existing conditions (a list so long that virtually any ailment renders a person ineligible and can therefore be excluded from the market; this incidentally, is one of the law's most popular provisions).  To be sure, there are parts of this enormous reform legislation that will undoubtedly need to be retooled, but the impact will be that the U.S. could possibly climb in the rankings to be closer to other advanced, industrialized societies, whereas the U.S. ranks lower than most in spite of our spending more on a per capita basis (catch my 2008 post HERE for details).

Medtronic Low Glucose Suspend Feature FINALLY Approved by FDA

Aside from that, we saw some long-overdue progress in some areas of treatment, although certainly not as soon as we should have.  Most notably, the Medtronic Low Glucose Suspend feature (in the Medtronic 530G/Veo) finally received FDA approval after Europeans and Australians (even Brazilians) have had access for years already.  Less discussed was the fact that the FDA's approval happened due in no small part to patient involvement and activism.  JDRF led the charge for this particular issue, and it was ultimately our patient testimonies and letters that convinced the FDA why this feature was so badly needed.

FDA Is Realizing that Patient Involvement Here To Stay

Patient involvement, led by patient groups including the JDRF, Diabetes Advocates and Diabetes Hands Foundation and several others has fundamentally changed how the FDA does business.  Although the FDA is required by law to consider input from the American public (which includes everyone, not just doctors and industry), in practice, patients have seldom had direct representation.  But a number of years ago (catch my push in 2010 HERE for more), I started urging patients to participate on accuracy, and I believe the FDA was a bit overwhelmed with how many patients submitted comments.  Since then, patients have pushed the agenda.  To be sure, another branch of the U.S. Government, specifically Medicare, in a move that got little public attention until it was implemented, has simultaneously managed to undermine this with its so-called competitive bidding (see my post HERE) process for mail orders.

However, my friend Bennet [http://www.ydmv.net/] has really done a lot more in that regardthan I have in recent years, with a campaign called StripSafely [http://www.stripsafely.com/] which has pushed the message home to the FDA that accuracy is important.  He has also attended several FDA meetings during the past year, putting a patient face and perspective on meetings that were once routinely regarded as "industry only" meetings.  The team at Close Concerns called attention to the fact that the FDA will hold a series of 20 patient meetings (effectively meeting with patients to discuss their concerns) for a number of different disease areas, yet miraculously, diabetes did not make the initial list of 16 planned meetings, which means there are only four meetings have not been determined, and diabetes should be on the list.  Why the FDA chose to effectively ignore the voices of one of the largest patient groups in the U.S. is unclear, but Close Concerns has a petition to encourage the FDA to put diabetes on the agenda with a Patient Conference for this group of diseases (see their writeup at http://ow.ly/sbrch).  People with diabetes are viewed by regulators and industry as pioneers in this regard, but other groups, including those with autoimmune rhematoid arthritis (RA) which differs from osteoarthritis common in the elderly, have seen what people with diabetes have accomplished and are following our lead to some extent.  In the future, there's a possibility of collaborating with them on issues that impacts both diseases on issues that affect us both, ranging from FDA guidance on biosimilars, to NIH funding.

Anyway, this is my list of some pretty noteworthy events in the diabetes care front for 2013.  I think there are positive signs for 2014, but patients and their caregivers cannot become complacent.  We have only begun to make our presence known with entities such as the FDA, but there are other areas (I'm thinking of the NIH's NIDDK which does not even have a permanent representative it sends to the NIH Autoimmune Diseases Coordinating Committee (ADCC), see http://1.usa.gov/1amQmtQ for more background.

Hello?

The Special Diabetes Program spends billions on type 1 research, yet the NIDDK doesn't have a permanent representative on a committee that could help?!  Yes, that's an area that needs attention, too.  I'm putting it on my New Years Resolutions list.  Maybe we can change that, too!

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