Novo Nordisk to price Tresiba (insulin degludec) at a ~60-70% premium over Levemir in the EU – February 19, 2013

Executive Highlights

  • Novo Nordisk plans to price Tresiba (insulin degludec) at a 60-70% premium over Levemir in the UK, with prices in Europe “more or less at the same level.” In Japan, Tresiba’s price premium relative to Levemir and Lantus is just 4%.

Reuters reported late last week that Novo Nordisk confirmed its decision to sell Tresiba (insulin degludec) at a 60-70% premium over Levemir (and Sanofi’s Lantus) in the UK, with prices in Europe “more or less at the same level.” We were initially surprised upon learning this, as Novo Nordisk also concluded price negotiations in Japan last week that resulted in a much more modest 4% price premium over Levemir (and Lantus). As we understand it, the high premium in the UK is meant to address the relative underpricing of analogs in this region. While Tresiba is undoubtedly an advance forward over Novo Nordisk’s Levemir (more stable, more flexible dosing, less hypoglycemia), in a cost-constrained European reimbursement environment, a 60-70% premium is striking, indeed. However, what the Reuters piece does not point out is that NICE has reduced the price of Levemir and Lantus to approximately ~$1.50/day assuming an “average” patient uses 40 units/day; for comparison, the cost of NPH in the UK was not much lower at ~$1/day in 2010. We were surprised, overall, that long-acting basal analogs had such a low price in Europe – even lower than in many emerging markets: the UK price ($1.50/day) is lower than Japan’s ($4/day) and China’s ($5/day) and falls well below the US list price for Levemir, which at $8/day ($5.50 after discounts; see table below) is by far the highest. Thus, a 70% premium, though it sounds like quite a lot, is actually not such a big price, particularly in view of higher-priced oral drugs.

Based on current pricing in the UK, which is much lower than we had expected, it appears that governments in Europe do not necessarily consider analogs to be the standard of care throughout Europe. Meanwhile, the company believes degludec’s benefits over current analogs should be reflected in a higher price. This is understandable, particularly given the very low prices of insulin in the EU. That said, there certainly is precedent for a new insulin or new technology to maintain pricing: some examples are Merck’s Janumet, Dexcom’s G4 Platinum CGM, and Insulet’s second-gen pod (new shipments in the US expected in the next couple of months).

Management also supported its decision to go after a high premium in the EU by remarking that insulin analogs are still cheaper than many other diabetes drugs. For comparison in the US, the very successful DPP-4 inhibitor Januvia (whose sales totaled $5.7 billion in 2012) costs about $9/day; the once-daily GLP-1 agonist Victoza about $12/day; and the once-weekly GLP-1 agonist Bydureon about $15/day.

Since Tresiba’s potential for profitability is considerably higher in the US, the FDA’s complete response letter (CRL; which delays US approval until a cardiovascular outcomes trial has been conducted) means that Novo Nordisk will now have to perform disproportionately better internationally in order to do as well as it had hoped in 2013. More details on the CRL can be found in our report at, while commentary on 2013 financial guidance can be found in our Novo Nordisk 4Q12 report at

Table 1: Approximate Levemir base price (40 units/day) by geography




Price of 40 u/day of Levemir


$8 (~$5.50 after discounts)







-- by Jessica Dong, Adam Brown, and Kelly Close


Editor's note: This report was changed on 2/20 to reflect that the price of Levemir in China is $5/day (all prices are based on approximate 40 units/day dosing), not $2.50 as originally reported.