On December 5, 2024, the media reported (see https://www.fiercepharma.com/pharma/novo-nordisk-slashes-prices-more-insulin-products-not-until-2026 for one such article) that Novo Nordisk would reduce U.S. list prices on several insulin products by more than 70%, effective January 2026. The new list price for Fiasp will drop from $289.36 to $72.34 per 10 mL vial, and Tresiba will decrease from $338.95 to $94.29 per 10 mL vial (see https://www.novonordisk-us.com/media/news-archive/news-details.html?id=915073 for more). Pens will remain about 40% more costly than vials of the same insulins. Novo Nordisk will also stop selling unbranded versions of Novolog and Tresiba.
These price reductions were initially announced in 2023 when Eli Lilly & Company declared (see https://www.prnewswire.com/news-releases/lilly-cuts-insulin-prices-by-70-and-caps-patient-insulin-out-of-pocket-costs-at-35-per-month-301758946.html for the press release) it would cut its insulin list prices by over 70% on March 1, 2023. Following Lilly’s announcement, Novo Nordisk (see https://www.prnewswire.com/news-releases/novo-nordisk-to-lower-us-prices-of-several-pre-filled-insulin-pens-and-vials-up-to-75-for-people-living-with-diabetes-in-january-2024-301771409.html for its announcement) and Sanofi (see its press release at https://www.globenewswire.com/en/news-release/2023/03/16/2629188/0/en/Press-Release-Sanofi-cuts-U-S-list-price-of-Lantus-its-most-prescribed-insulin-by-78-and-caps-out-of-pocket-Lantus-costs-at-35-for-all-patients-with-commercial-insurance.html for more) made very similar statements.
However, these cuts were not due to government policy, but rather a strategic move to bypass PBMs and reduce artificially inflated prices caused by rebate demands. Prescription drug rebates, amounting to $334 billion collectively across all drug classes in 2023 (see https://www.drugchannels.net/2024/07/pbm-power-gross-to-net-bubble-reached.html for the source where I attained this figure), are classified as "legally-exempted rebate kickbacks" from the Federal Antikickback Statute thanks to a special "safe-harbor exemption" implemented by the Office of Inspector General for the U.S. Department of Health and Human Services, and I have coined that term ("legally-exempted rebate kickbacks") because it's the best description of exactly what they are and no lawmaker could mistake what you mean when you refer to them in that manner.
The American Rescue Plan of 2021 also influenced these changes, requiring companies selling drugs with very high list prices and significant rebates to lower prices drastically in order to avoid negative pricing consequences (see https://www.kff.org/policy-watch/what-are-the-implications-of-the-recent-elimination-of-the-medicaid-prescription-drug-rebate-cap/ for more background) which University of Southern California's Dr. Robert Popovian, Erin Delaney, and Dr. Michael Mandel eloquently wrote about (see https://progressivepolicyinstitute.medium.com/are-we-on-the-cusp-of-a-new-drug-pricing-paradigm-fdf611c009b3 for more). In essence, what the American Rescue Plan of 2021 did was eliminated a cap upon which rebates would have to be reimbursed to Medicaid. However, in spite of what it is now doing with insulin, Novo Nordisk nevertheless continues to pay "legally-exempted rebate kickbacks" to PBMs for formulary exclusion of rival GLP-1 inhibitors, in order to maintain its market dominance by keeping cheaper generic (copies of the GLP-1 inhibitor drug known as Saxenda/Victoza have been sold since June 2024) alternatives "off-formulary" to prevent patients from having access to older (but still-efficacious) medicines in the same drug class at much lower prices.
Novo Nordisk’s insulin price cuts come as the company pivots towards more profitable weight-loss drugs. The company has subtly shifted its identity from the world's largest insulin manufacturer to a company which makes "chronic disease medications". This change aligns with Novo Nordisk’s awareness of pending FDA approval for many insulin aspart copies and the development of at least one Tresiba copy from Amphastar Pharmaceuticals/ANP. With competitors like Biocon, Sandoz/Gan & Lee, Amphastar Pharmaceuticals/ANP, Lannett Company/HEC, CivicaRx-CivicaScript/GeneSys Biologics, Meitheal Pharmaceuticals/Tonghua Dongbao and others all developing biosimilar insulin products, Novo Nordisk aims to capture dominant market share in the lucrative weight-loss drug segment instead. Rival Lilly, on the other hand, is bypassing the rebate-kickback marketing channel and instead is using its LillyDirect initiative to bypass the kickback-driven price inflation, hence it sells Mounjaro/Zepbound for far less money using a direct-to-consumer model. It also recently introduced a smaller vial size of those products in order to reduce patient out-of-pocket costs for them.
The commoditization of insulin means that while U.S. patients should continue to have access to insulin through nonprofit suppliers like Civica, the exit of major insulin manufacturers could stifle innovation. Novo Nordisk’s focus on weekly basal insulin icodec (to be branded Awiqli), primarily for Type 2 diabetes patients (see https://www.medpagetoday.com/endocrinology/type1diabetes/110337 for more) exemplifies this shift. Without significant investment from companies like Novo Nordisk and rivals Lilly and Sanofi, future insulin innovations may depend on academia or unprofitable startups like Sensulin.
Because Civica is a nonprofit company (Breakthrough T1D/JDRF funded the development of its 3 insulin biosimilars currently pending FDA approval decisions), Civica is unable to fund R&D into any new insulins, leaving patients' future insulin needs to the academic sector unless a startup such as Sensulin makes meaningful progress which giant Novo Nordisk had failed to do.
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