Wednesday, July 14, 2021

Making Sense of the Novo Nordisk-Walmart Partnership to Sell Some Discounted Insulin Analogues

On June 29, 2021, Walmart Inc. and the American business unit of Novo Nordisk A/S (which is based just outside of Princeton, New Jersey known as Novo Nordisk Inc.) dropped what was intended to be a news bombshell coming just as the ADA Scientific Sessions was coming to a close. 

In fact, the insulin makers had hardly any big news coming from the ADA Scientific Sessions themselves this year or for the past several years (about the biggest news was from 2018 when, Novo Nordisk acquired a UK-based company known as Ziylo to use its technology to try and develop glucose-responsive insulin, but that still has a long while before it is ready for commercialization ... if ever), because most have shifted R&D towards GLP-1 inhibitors for T2D, and regularly get assaulted over runaway prices, so why not make some headlines by doing something intended to capture press attention of a captive audience?!

In essence, the pharmacies in Walmart's retail stores will start selling a version of Novo Nordisk's slightly older (and now out-of-patent, more on that in a minute) rapid-acting insulin analogue branded as Novolog which they will call Relion Novolog in the U.S. for $72.88 per vial and the company's 5-pack of insulin pens branded as FlexPens for $85.88. See the press release from Walmart HERE for details). 

In Walmart's press release, the company boasted that this would be the "first-ever private branded analogue insulin", which it also claimed would "revolutionize the access and affordability to diabetes care" by offering customers a significant price savings without compromising quality. The product will be called ReliOn Novolog vials and FlexPens.

Dr. Cheryl Pegus, Walmart's EVP of health and wellness said that at least 3 million Walmart customers have diabetes. "This price point we hope will improve, and hopefully revolutionize the accessibility and affordability of insulin," Pegus said in a press call.

"We know many people with diabetes struggle to manage the financial burden of this condition, and we are focused on helping by providing affordable solutions. We also know this is a condition that disproportionately impacts underserved populations. With ReliOn Novolog insulin, we're adding a high-quality medication for diabetes to the already affordable ReliOn line of products and continuing our commitment to improve access and lowering cost of care," Dr. Pegus said in the announcement.

Behind the scenes, however, U.S. patients quickly started questioning the so-called Walmart "Always Low Prices" assertion on insulin. In fact, Walmart abandoned that old but well-known slogan after 19 years for a far less-memorable one with simply "Save money. Live better," back in 2007.

Walmart insulin has long been a go-to response from people who are clueless just how much U.S. insulin list prices have increased over the past decade and don't really care but they want to sound semi-informed and empathetic. 

Depending upon the insulin variety and the time period examined, we can safely say that the retail list prices for rapid-acting insulin analogues have increased by more than 1000% (that's over one thousand percent) since being introduced. The following charts were courtesy of articles published in Business Insider.

Faced with an upcoming election year imperative which it had basically done nothing about for several years when former Lilly exec Alex Azar ran the U.S. Department of Health and Human Services, the Trump Administration did try several things (some of which sounded positive) to live up to his promise to bring the cost of insulin way down. Most efforts resulted in lawsuits from PhRMA, but one was achieved: on July 17, 2019, the IRS expanded its list of preventive care benefits that may be provided by high-deductible health plans (HDHP) paid for without having satisfied a deductible, and that list now includes diabetes treatments (which were previously omitted). The IRS rules also apply to healthcare savings accounts. Unfortunately for the Trump administration, the impact did not happen quickly enough to save his presidency. 

Because each company has a different healthcare insurance plan year "start dates", hardly anyone enjoyed the benefit of a change which I argued insulin makers should have taken years earlier but had failed to do so. However, now that the rule has been in place for a few years, more and more patients are starting to realize the benefit of pre-deductible insulin coverage, and more will continue to do so when their employer healthcare plans are renewed or sign up with a new insurer.

Anyway, the Walmart ReliOn Novolog intro sounded oddly suspicious because Walmart has been known to switch its "house-brand" to Lilly-made insulins in the past. Most recently, in June 2010, it switched house-brands of insulin from Novo Nordisk to Lilly (see for a memory refresh if you don't remember that temporary switch to Lilly insulin), plus the markdowns weren't nearly as deep as Novo Nordisk admits it now pays in rebates to U.S. pharmacy benefits managers ("PBM's") to secure commercial healthcare insurance company formulary placement, so the Walmart move may help some, but certainly not all.

Insulin Prices 75% Off

In Novo Nordisk's recent investor presentations over the past year or so, the company has finally started to reveal to investors exactly how much money (as a percentage of gross sales) it spends on prescription drug rebates paid to PBM's, perhaps because investors seem to ask the company about it every single time the company releases its quarterly earnings. It is a LOT of money!

Previously, rebates were considered a fiercely-guarded "trade secret", but following Novo Nordisk's financial meltdown in 2016, when former CEO Lars Rebien Sørensen uncharacteristically announced he was "retiring early" (something which almost never happens in Denmark), followed by a stream of investor lawsuits because investors felt the company had misled them on the magnitude of the company's U.S. rebate problems, the company has started to reveal its exposure to Rx rebates in the U.S.

In Novo Nordisk's third quarterly investor presentation of 2020, the company revealed that 71% of the company's gross U.S. sales were going out the window to PBM's in the form of rebates paid to PBM's. By the time the company had released its Q4 2020 earnings, in its presentation, Novo Nordisk disclosed that Rx rebates had increased to 74% of gross U.S. sales - a quarter-over-quarter increase of 3%. The following image is from slide #103 of the Novo Nordisk A/S Q4 2020 investor presentation. Note the figure in the last quarter in the graph on the right side in which the 2020 data point was revealed to be 74%):

That's absolutely bonkers. 

Novo Nordisk tends to remove its quarterly investor presentations from the company website over time, but archived copies are still accessible via, visit Novo Nordisk A/S Earnings Presentation Slides (specifically, see slide #103) archived at for the reveal.

So the Rx rebate monster is alive and well, and Novo Nordisk decided to copy rival Lilly's move to sell what it refers to as an "Unbranded Biologic". As it turned out, half-price wasn't really the price, its actually a fair amount less. 

Savvy consumers quickly discovered they could get readily-available GoodRx coupons online (or on their smartphone app) which actually made the out-of-pocket expense for a vial of the unbranded biologic of Novo Nordisk U100 Insulin Aspart to be about 75% off the suggested retail price of brand-name Novolog when purchased at Walgreens. For that reason, the pharmaceutical industry's baseless claim that slashing prices by 90% would kill their businesses and R&D is revealed to be just a falsehood. In fact, they are already marking prices down by at least 75% on insulin with zero impact to their own bottom lines. 

Voila! 75% off -- instantly. No strings attached. No enrollment required. No providing the company with personal information.

The good news for patients is that the "authorized generics" (or as Novo Nordisk calls them "unbranded biologics") versions have brought much-needed affordability to insulin that now looks comparable to what the rest of the world pays for rapid-acting insulin analogues. With discount coupons, the price is about $55/vial, which is about the same amount they pay for a vial of Novolog in Germany (or Novorapid as its called in that country). Still, basal insulin analogues are not quite as affordable ... yet ... but we know with certainty that there are at least 3 copies of insulin glargine working their way through the FDA approval process. 

Add to that a Lilly copy branded as Basaglar and another called Semglee from Viatris, and there are several. But Sanofi's (now EuroAPI's) aggressive discounting of brand-name Lantus with coupons and back-door discounts, means that Lantus remains the undisputed king of basal insulin varieties in spite of repeated efforts from Novo Nordisk to develop newer basal analogues. So far, commercial healthcare insurance company payers are balking at paying Novo Nordisk any kind of premium price for the company's newest "Lantus killer" known as Tresiba (insulin degludec rDNA origin). Insurance is happy to take Lantus rebates at the expense of Tresiba.

For its part, Novo Nordisk's current CEO Lars Fruergaard Jørgensen and the company he leads has basically said that while Novo Nordisk expects to maintain its global leadership in the insulin market, most of the company's revenue growth has been derived from GLP-1 agonist products used in the treatment of some patients with Type 2 diabetes while the company continues to make minor improvements to those to extend the company's patent exclusivity. The company also acquired an FDA-label extension for its Victoza to be used as a weight-loss drug. But the company's big profit driver is now clearly Type 2 diabetes meds, not insulin which is the only FDA-approved treatment for autoimmune Type 1 diabetes (T1D) whose lives depend upon exogenous insulin. In fact, the company made a rare acquisition when it acquired Ziylo to help it with glucose-responsive insulin, if that makes it thru clinical trials successfully which remains a big IF.

Longtime Business Strategy: "Retire" Old Insulin Varieties and FORCE Patients to Use Newer Patent-Protected Insulins

For their part, both Novo Nordisk and Lilly have resurrected a very old playbook by planning to "retire" their now out-of-patent rapid-acting insulin analogues with new & improved versions which remain patent protected. 

Over my 46 years living with T1D, they've done it to me 3 times where they simply stopped making the insulin I prefer using. First I used the Lilly Iletin Lente series (there were three of them: Semilente, Lente, and Ultralente). That worked reasonably well for my needs. But then Lilly partnered with startup Genentech to introduce synthetic insulins no one really wanted or needed because they did not offer superior glycemic control and had a higher price tag to boot. So Lilly simply stopped making the older products and forced patients to use the new Humulin products which no one was asking for. At that point, I switched from Iletin Lente (L) to Humulin L. That worked no better, and I stopped having signs of impending hypoglycemia which the company worked to discredit in spite of cases being documented globally. But then, a few years later, Lilly stopped making the entire Lente series of Humulin insulins.

Generally speaking, that's been a recurring pattern. 

First, they retired U-40 versions and forced patients to adopt U-100 versions instead. That also meant getting new syringes. Then they dropped insulin varieties sourced from abbatoir animal sources. With that retirement, at least the same insulin varieties were offered. But the Lente series required them to make Semilente and Ultralente and mix them to create Lente. That was the first old-school product to get the axe. But it had a newer, patent-protected version it called Humalog (U100 insulin lispro rDNA origin) to replace it. That was the first truly lab-invented insulin which supposedly delivered superior glycemic control ... for a higher price, naturally.

In 2017, Novo Nordisk got FDA approval for a marginally-faster version of its insulin workhorse Novolog. It is a slightly faster version of insulin aspart, so it gave the new product the name "Fiasp" which means Faster insulin aspart. Rival Lilly followed suit when a faster version of its bestselling Humalog was FDA-approved on June 15, 2020. Lilly branded that as Lyumjev (insulin lispro-aabc rDNA origin), but it acts much like Novo Nordisk's Fiasp does, and Lilly's patent expires 3 years after Novo Nordisk's patents on Fiasp expire. 

Back to the Walmart Relion Novolog analog intro. 

One reason the Walmart announcement wasn't quite the ray of hope some expected was because a subsidiary of the U.S. business unit for Novo Nordisk called Novo Nordisk Pharma Inc. copied its rival Eli Lilly & Company, Inc. also introduced "authorized generic" insulins called U100 Novo Nordisk Insulin Aspart back in 2020. After rival Lilly did so, we discovered that CVS Health, owner of the large Caremark PBM business and also owner of commercial healthcare insurance company Aetna, refused to carry the less costly product in its pharmacies because it wanted jumbo insulin rebates from Lilly and Novo Nordisk on brand-name insulin varieties rather than carrying the less heavily rebated (and cheaper) insulin varieties which would deliver important, more affordable access for patients. But rival Walgreens DID carry the less heavily-rebated product. They may need to order it, but a pharmacist can handle that for patients.

Recall that Eli Lilly announced on March 4, 2019 its plan to sell what the press called a "half-priced" version of its own Humalog merchandised by its ImClone Systems Inc. subsidiary which the company had acquired in 2008. The press release for the Lilly announcement can be read HERE. Lilly dubbed its "authrorized generic" U100 Lilly Insulin Lispro. The effort was a means to try and bypass the pharmacy benefits manager (PBM) mess which demand ever-higher "rebates" from pharmaceutical companies, and artificially bloat the list price cost of prescription drugs for many consumers at the pharmacy checkout counter.

After Lilly's move, Novo Nordisk determined that Lilly's idea was an effective one on the affordability front, so on September 6, 2019 (see the company's press release HERE), it too promised to (just as Lilly was already doing as part of the company's affordability options) to launch its own "authorized generic" version of Novolog. Just as U100 Lilly Insulin Lispro faced struggles persuading some big drugstore chains like CVS to even carry it because they are financially addicted to Rx rebate dollars they haven't earned, Novo Nordisk U100 Insulin Aspart can't be purchased at all pharmacies (but as noted, big pharmacy rival Walgreens carries it).

As I've revealed in several recent posts over the past year (look to the archives), the presence of coupon-generating websites/apps like GoodRx have started to change the rules. Insurance plans haven't quite figured that out yet. 

But many patients find it is still cheaper to use GoodRx coupons while they're satisfying a deductible because they can take advantage of discounted, PBM-negotiated prices on prescriptions by paying cash. Even though it contributes nothing to their deductibles, the reality is that insurance companies only credit patients 25% of the bloated price they pay for insulin, which means it makes more sense financially to simply bypass insurance until their deductibles are satisfied. People with diabetes usually satisfy deductibles about halfway through the year given the costly insulin, glucose meters, CGM sensors, as well as quarterly appointments with their endocrinologists or family doctor which means they satisfy deductibles more quickly than many others.

New & Improved Means Patent Exclusivity for Pharma. Superior Glycemic Control? Yeah, That Too.

Consider these images which come from a presentation I gave in autumn 2020 (see my post about and and the entire presentation HERE) which I believe says more than 1000 words can: 

As noted, Novo Nordisk and Lilly each now have "new & improved" rapid-acting insulin analogues which they will focus on trying to switch patients over to because those products still enjoy years of patent exclusivity on the market. If you think about the recent Walmart announcement with Novo Nordisk, it makes perfect sense. 

Novo Nordisk already has a pretty large inventory of Novolog and we know there are several biosimilars in the works, including from both Viatris/Biocon, and Lannett/HEC. A third may be in the works from Novartis-Sandoz/Gan & Lee, although the latter seems spooked by the rebate problem in the U.S., so we haven't seen or heard much from that partnership. Sanofi sells a Novolog biosimilar in Europe and I believe Canada, but has told investors it has no plans to sell one in the U.S. given how fast sales of its Humalog biosim branded as Admelog have been declining (since Lilly and Novo launched cheaper "authorized generics"). Of note: all of those except Sanofi involve a U.S. business handling FDA applications and approvals, while the products are manufactured in Asia and shipped across the Pacific Ocean via the Port of Los Angeles. Viatris/Biocon has a massive insulin factory in Malaysia, while Lannett is partnering with China-based HEC which already makes Lantus and Novolog biosimilars being sold in China. 

Perhaps you can imagine Novo Nordisk's dilemma. 

It has a massive inventory of a now-old product (Novolog) which is likely to face a number of biosimilar copies in the the next few years. It already has several copies from rivals sold in Europe, although the U.S. is traditionally the company's cash-cow. Cutting a deal with Walmart might offer it a solution to sell its existing Novolog inventory. The price isn't marked-down quite as much as rebates require, so it looks like its a benevolent company partnering with Walmart which is known for lower prices, and it has national distribution. And, if the price is still too high, Walmart can always sell it for even less.

Sounds like a win for Novo Nordisk. But Walmart appears to benefit less. Unless Novo Nordisk happens to pay Walmart some kind of rebate. Instead of reducing prices for consumers, Walmart might keep the rebate dollars. But if sales aren't great, Walmart can always reduce prices on the product even further.

Biosimilars have not materially reduced prices for insulin in the U.S., but the data suggest that once there are several of each biosimilar on the market, prices do tend to fall. Currently, only Lantus (U100 insulin glargine rDNA origin) has more than one biosimilar on the market. There's a Lilly copy called Basaglar and another one from Viatris/Biocon called Semglee. Sanofi also makes a version of Novolog sold in Europe, but has said it won't bother selling one in the U.S. because sales for its Admelog biosim have been falling. In response, Sanofi (to be called Euro API soon) has aggressively slashed prices of original Lantus to keep market share, so both biosimilars have struggled thanks to the "rebate wall" which harms biosimilars.

Fiasp will replace Novolog (Fiasp stands for Faster insulin aspart), while Lyumjev will replace Humalog. Its only a matter of when, likely not IF that happens. Over my 46 years of living with T1D, I've had countless insulin varieties "retired" and removed from the market on me. First, it was Lilly's Iletin. I hated the biosynthetic varieties, which delivered no meaningful clinical benefit in terms of glycemic control, but it caused me hypoglycemia unawareness, plus it raised the prices, too. Some benefit! But retiring the old product was the way the companies forced people to switch from Iletin to Humulin, which hardly anyone wanted to do. 

Of rapid-acting analogue insulins, so far only Humalog has a rival on the U.S. market which is made by Sanofi (soon to be known as Euro API) branded as Admelog. I've tried it and it works as well as Humalog and it is somewhat cheaper with a coupon from Sanofi (catch my post HERE). However, sales of Admelog have been steadily falling. Part of the reason is because parent company Sanofi was more concerned about spinning the company off as a stand-alone company to even worry about it, so insulin product managers lacked resources to effectively address it, but once the spin-off happens, maybe things will change. 

Side note: At the recent ADA Scientific Sessions, another French biotech company called Adocia released news that it will soon trial an improvement to rapid-acting insulin analogues by including an analogue of amylin to those insulins (see the press release HERE for detail). That's a conversation for another day, but its worth noting because a stand-alone (its approved only as an adjunctive treatment to insulin) amylin analog treatment called Symlin already exists, this is the first to add it back into insulin since manufacturers started removing it from insulin years ago. That company (Adocia) said: "In Type 1 diabetes, ultimately, neither insulin nor amylin are secreted (and GLP-1 secretion is deficient). It is therefore possible that the use of insulin alone cannot address all the metabolic deficiencies related to [Type 1] diabetes." If I had to guess, I'd say that Sanofi/EuroAPI could offer "new & improved" biosimilars of lispro and aspart by adding things like amylin to the boiosimilars thanks to research done by a different France-based biotech firm (they'd have to sign a partnership first, so we can look for something like that). That would yield not only improved glycemic control, but would also offer the benefit of longer patent windows for a company whose insulin business has been struggling.

Perhaps that can be something Euro API will investigate to turn its struggling commodity insulin business around? 

Who knows, but its certainly the type of thing which might help the company which has arguably become a one-trick pony in the insulin biz, relying on Lantus for virtually all of its insulin revenues in the U.S.

But Walmart's Novo Nordisk Novolog deal is yet another crack in the rebate wall fortress (and one which is long overdue). Whether its enough to knock the proverbial rebate wall down completely remains to be seen. 

Adam Fein, CEO of the Drug Channels Institute eloquently summarized the utter stupidity of U.S. prescription drug pricing (see his post at for details) this way:

"Pharmacy pricing and benefit design are fundamentally broken. Three out of four consumers who used GoodRx already had commercial, Medicare, or Medicaid insurance. 

This means that someone — the consumer, their employer, and/or the government — paid insurance premiums for a pharmacy benefit managed by a PBM. Yet it was still worthwhile for people to bypass their [own healthcare insurance] plan's out-of-pocket costs and PBM network rates in favor of a different PBM's rates [offered thru GoodRx].

Discount cards such as GoodRx save consumers money by leveraging the craziness baked into the U.S. pharmacy pricing, reimbursement, and dispensing system. It's hard not to dislike a system that enables these games."

"Craziness" is describing the situation kindly from a man whose very business is as a consultant is to help paying clients (pharma, drug wholesalers, pharmacy benefits managers, insurance company formulary managers, and pharmacy retailers) to navigate a dysfunctional U.S. "drug channels" system and maximize their own benefits from it. 

I'm more blunt about it: it is completely stupid, and no other country in the world does it the American way because it costs SOOOOO much more money. So yeah, it is incredibly stupid. It is a way to piss away nearly $200 billion/year kind of stupid.

Patients should still shop around for the best deal on insulin aspart (especially if they still have a deductible to satisfy or they are uninsured). Also, there are several U100 insulin aspart biosimilars in development right now (which explains Novo Nordisk's imperative to "retire" it) from Viatris (formerly known as Mylan)/Biocon and Lannett Company/HEC. Others could be in the works from Novartis' Sandoz unit/Gan & Lee (which was announced with some fanfare back in 2018). 

Just remember: GoodRx coupons may likely enable you to buy insulin aspart (made by Novo Nordisk) for even less than Walmart is currently selling it. I have yet to determine if GoodRx coupons can be used at Walmart to buy Relion Novolog insulin, which might mean the prices are even lower. For me personally, I refuse to pay for Novo Nordisk insulins if I don't have to because they just aren't as effective for me, but currently, GoodRx coupons redeemable at Walgreens pharmacies nationwide are selling vials of Novo Nordisk U100 Insulin Aspart for $52.78. GoodRx offers coupons for vials of Lilly U100 Insulin Lispro purchased at Walgreens for $48.07/vial.

Pharma created this stupid situation, and pharma has an obligation to fix it without the help of government. 

For once, we can honestly say that government did nothing to create the situation we now find ourselves in because the prevailing decades-long U.S. policy has been laissez-faire when it came to drug prices. Pharma lobbied for that, and pharma got exactly what it wanted. Now, insurance companies are bigger than drug companies are, and they are more powerful than drug companies, and suddenly, pharma is crying for Washington politicians to help save them from the rebate system they created and continue to perpetuate. 

Ignore them. 

They lie when they say a 90% price slashing will hurt R&D (we know with certainty they are already slashing insulin prices by 75%); what it will do is force pharma to buy back less of their own stock and pay senior executives less in bonuses.

It's just another day in the insane U.S. insulin market. 

Remember: I called it stupid for a genuine reason. 

But patients/consumers shouldn't have to pay for stupid. If price controls are what fixes it, pharma deserves to have price controls imposed upon them. 

Patients already have enough scars from a completely stupid and dysfunctional Rx market.

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