Novo Nordisk launches Fiasp and Ozempic in the US – February 6, 2018

Novo Nordisk announced yesterday that two next-generation diabetes products have been launched in US pharmacies: (i) once-weekly GLP-1 agonist Ozempic (semaglutide) and (ii) mealtime insulin Fiasp (faster-acting insulin aspart). Our team interviewed Mr. David Moore, SVP of Commercial for Novo Nordisk US, and we include his insights in our piece below, organized by product.

Ozempic

Ozempic’s US launch comes two months after the once-weekly GLP-1 agonist (semaglutide) received FDA approval. This rather quick turnaround time was expected, given Novo Nordisk’s commitment to the second-generation GLP-1: During the company’s 4Q17 update last week, CEO Mr. Lars Jørgensen described the US launch team as “all fired up” and ready to hit the ground running come Monday. He has previously outlined how the company is approaching semaglutide as “probably the biggest opportunity we’ve ever had in Novo Nordisk,” and he suggested that Ozempic could bring in DKK 1 billion (~$166 million) in 2018.

Ozempic will be available at 0.5 mg and 1.0 mg once-weekly doses, in a light blue FlexTouch pen (similar in appearance to Victoza pens). 

We couldn’t be happier about the swift launch, because it means a more potent GLP-1 agonist with lower injection burden vs. Novo Nordisk’s once-daily Victoza (liraglutide) is now available to people with diabetes in the US. Semaglutide has demonstrated superior A1c-lowering and weight loss head-to-head vs. AZ’s once-weekly Bydureon (exenatide) and Lilly’s once-weekly Trulicity (dulaglutide), which underscores the potency.

In fact, the full SUSTAIN 7 results showing superiority over Trulicity were just published online in the Lancet Diabetes & Endocrinology. Novo Nordisk SVP of Commercial Mr. David Moore highlighted how this will be helpful information for HCPs to have in prescribing GLP-1 agonist treatment to their patients with type 2 diabetes. Above all, however, Mr. Moore emphasized the value of expanded patient choice within the GLP-1 class. He positioned Ozempic as another option for individuals who prefer once-weekly dosing over once-daily, for people who could benefit from additional glucose-lowering and weight loss, for those who may prefer the Ozempic FlexTouch over an autoinjector like the IDEO-designed Trulicity pen or Bydureon BCise (these devices differ meaningfully in terms of weight in your hand, discretion, etc. and two patients may express entirely distinct views on which is “best”). We agree that expanded choice is a win for patients, and we’d love to see Novo Nordisk and other GLP-1 manufacturers support the development of decision support tools that aid provider/patient decision-making.

Ozempic also stands to grow the entire GLP-1 agonist class, and we imagine it may improve reimbursement for all GLP-1s as well, though these trends remain to be seen throughout 2018 and beyond.

Pricing & Reimbursement

• Novo Nordisk has set Ozempic’s list price on par with market-leading weekly GLP-1s (presumably, Lilly’s Trulicity) and higher than the list price for Victoza. When we called our local pharmacies on Monday afternoon, Ozempic was not yet in stock, but a one-month supply of Trulicity was $799 for both the 0.75 mg dose and the 1.5 mg dose. Given this, we estimate that Ozempic’s list price for 0.5 mg and 1.0 mg will also be ~$800/month. AZ’s once-weekly Bydureon was listed at $784/month at our San Francisco pharmacies, while Novo Nordisk’s once-daily Victoza was listed at $643/month. Although the company made a deliberate decision not to price Ozempic at a premium to other once-weeklys, the product is meaningfully more expensive than Victoza – by our calculations, Ozempic will cost an extra ~$5.20/day, which is not insignificant. Notably, semaglutide is only available in Novo Nordisk’s more advanced FlexTouch device, which is “inherently costlier” to manufacture than the FlexPen (per management’s remarks on the 3Q17 earnings call). This explains the higher pricing relative to Victoza, and we hope payers in particular appreciate the added benefits to Ozempic. As Mr. Moore explained in our conversation, “we wanted Ozempic to be available in our newest technology.” We also acknowledge that list price only means so much without considering patient discounts and reimbursement. Mr. Jørgensen emphasized on last week’s earnings call that Novo Nordisk will be careful in promoting an accurate clinical picture of semaglutide to all payers: “we don’t want to rush access where we jeopardize appreciation of what the product can do.”
• With the Ozempic savings card, eligible, commercially-insured patients could face a co-pay as low as $25/month. Mr. Moore shared that this discount would apply for a two-year period. This is similar to the savings card launched for Fiasp in the US (see below). Mr. Moore acknowledged that access plays a leading role in real-world treatment decisions, and he outlined Novo Nordisk’s goal to “remove that as a barrier.” In other words, the company aims to make Ozempic (and Fiasp) accessible to as many people with diabetes as possible, so that HCPs can decide when to start or switch patients to a more advanced drug and would be able to carry out their ideal medication plan, unencumbered by insurance woes.

Adherence & Ozempic App?

• Mr. Moore suggested that Novo Nordisk is open to the possibility of a smartphone app to accompany Ozempic, though management is exploring a range of options to support adherence to the once-weekly medicine, and has yet to settle on one. It was somewhat surprising to us that an app wasn't included as part of initial launch, though we're glad the company is taking the time to get it right (still, we would have assumed this could be done by launch). A lower injection burden boosts adherence for many people: According to dQ&A data from 4Q17, 87% of Trulicity users were satisfied with how often they have to take the drug (reporting a score of 9 or 10 out of 10) vs. 77% of Victoza users. But for others, a once-weekly regimen is more difficult to remember than a once-daily routine. An app could address this problem and could improve real-world adherence, which matters to patients (in terms of experiencing better outcomes and feeling successful/satisfied), HCPs, and payers alike. The app could also provide other advice and motivation. We note that Lilly’s IDEO-designed app to accompany Trulicity has received positive patient feedback, and we imagine a similar app could be beneficial for the Ozempic business. Novo Nordisk management has highlighted the company’s commitment to digital health as of late, and we see the Ozempic launch as a fantastic opportunity on this front. Moreover, we’ll be eager to see real-world data on adherence across various GLP-1 agonists, particularly the different once-weeklys.

CVOTs & Additional Clinical Trials Planned

• It’s quite notable, according to Mr. Moore, that Ozempic is FDA-approved with CV safety data (from SUSTAIN 6) already on the label. This hasn’t been the case for most diabetes drugs, and it should offer some reassurance to HCPs/patients. Even still, FDA’s reflection of SUSTAIN 6 on the Ozempic label is conservative, in our view. The US label mentions this pre-market CVOT in section 14 on clinical studies (this is buried pretty deep in product information), but specifies “no increased risk for MACE” without any allusion to possible cardioprotection. SUSTAIN 6 actually found a 26% risk reduction for three-point MACE (non-fatal MI, non-fatal stroke, or CV death) with semaglutide vs. placebo (HR=0.74, 95% CI: 0.58-0.95, p=0.02 for superiority), but the CVOT was relatively small (n=3,297) and relative short (~two years).
• To this end, Novo Nordisk announced last week that a second CVOT for semaglutide in type 2 diabetes – the SOUL trial – will commence in mid-2018. This post-market CVOT has been in the works as the company prepared for Ozempic’s US approval and launch. It will enroll ~13,000 type 2 patients with established CV disease or CKD, and will follow them for 3.5-5 years on once-weekly semaglutide or placebo. The study’s primary composite outcome is three-point MACE. Secondary endpoints include all-cause mortality, new-onset nephropathy (which was also reduced by a statistically significant margin in SUSTAIN 6), health economic outcomes, and patient-reported outcomes (PROs). We anticipate that retinopathy data from SOUL will also be important, given the heightened risk for this complication seen in SUSTAIN 6, although this appears to be a case of “early worsening phenomenon” caused by rapid A1c decline. As part of EMA approval, Novo Nordisk has agreed to conduct a long-term study of retinopathy outcomes with Ozempic. Additionally, the company is pursuing an obesity indication for semaglutide and will launch the SELECT CVOT, plus four phase 3a STEP trials, in people with obesity by end of 2018.

Fiasp

Fiasp (faster-acting insulin aspart) is now available in US pharmacies as the first next-generation mealtime insulin for adults with type 1 or type 2 diabetes. Flexible dosing will be a key differentiating factor for Fiasp. Mr. Moore emphasized that this is the first-ever mealtime insulin injection without a pre-meal dosing recommendation (the faster-acting agent can be injected up to 20 minutes after someone starts eating), which makes it a much more convenient option.

Fiasp was FDA-approved in late September 2017, after an initial Complete Response Letter (CRL) in October 2016 due to concerns over immunogenicity and pharmacology assays. We’re thrilled that the advanced (and highly-anticipated) rapid-acting insulin is finally available to people with diabetes in the US (the product was rolled out in Canada and then Europe in the spring of 2017). On top of greater convenience and flexibility around meals, we imagine Fiasp could help mitigate fear of hypoglycemia in patients – the faster-offset/shorter tail ensures that less residual bolus insulin lingers in the bloodstream.

Mr. Moore added that there hasn’t been meaningful innovation in bolus insulin for almost 17 years. So, while some claim that Fiasp offers incremental benefit over existing options, we argue that any benefit has been a long time coming.

As part of Novo Nordisk’s new-generation insulin portfolio (along with Tresiba, Xultophy, and Ryzodeg), Fiasp globally helped drive 50% of growth in the company’s overall diabetes/obesity business in 2017. That being said, Novo Nordisk has broken out sales for all of these product except Fiasp, leading us to estimate total global sales of Fiasp in 2017 at no more than $20 million (compared to $1.1 billion for next-gen basal insulin Tresiba). Since the US is the largest market for diabetes drugs, we won’t read too much into this until US Fiasp sales are captured in 1Q18 financial results and beyond.

Pricing & Reimbursement

• Novo Nordisk has stated that Fiasp will be priced at parity to NovoLog (insulin aspart) in the US. A call to our local San Francisco pharmacies revealed prices of $590 for five 300-unit NovoLog pens vs. $630 for five equivalent Fiasp pens, though we understand that prices can vary across pharmacies. For additional context, Lilly’s Humalog (insulin lispro) was listed at $647 for five pens, slightly more expensive per month relative to next-gen Fiasp (again, we caution against over-interpretation of these list prices). These are before-insurance prices, and list price only means so much without factoring in reimbursement and patient discounts. Fiasp was not approved until after the three leading pharmacy benefit managers (PBMs) in the US released their 2018 formularies (CVS Health, UnitedHealthcare, and Express Scripts), and Mr. Moore noted that reimbursement will be built gradually over at least 12 months following launch. Novo Nordisk is currently working with PBMs and managed care organizations to secure coverage. Fiasp is not mentioned in the UnitedHealthcare or CVS Health national formularies, but it is excluded (alongside NovoLog) on the Express Scripts national formulary for 2018. Among the three, only CVS Health prefers NovoLog over Humalog and Sanofi’s Apidra, and we wonder if Novo Nordisk will leverage this into coverage for Fiasp. We’ve heard from Novo Nordisk, Lilly, and Sanofi alike that contracts are more exclusive in the rapid-acting category vs. any other diabetes drug class; payers (wrongly) view mealtime insulins as highly-interchangeable and thus restrict patient choice to preferred products based on rebates set with different manufacturers. Time will tell how (i) payers approach Fiasp and (ii) formulary positioning and rebate negotiations affect patient access/affordability, but we hope the advanced insulin will really start taking off commercially by 2019.
• Mr. Moore heavily emphasized that, like Ozempic, Fiasp has been launched with a savings card for eligible patients on commercial insurance, which reduces co-pays to as little as $25/month for up to two years. Functionally, this makes Fiasp more accessible to patients in the interim while Novo Nordisk works on building reimbursement. Commercial coverage tends to come first, followed by Medicare Part D, though the company is actively pursuing both, according to Mr. Moore. He noted that access and reimbursement can dictate treatment decisions, and underscored Novo Nordisk’s commitment to minimizing that barrier. He explained that Novo Nordisk wants it to be easy for clinicians to switch patients from NovoLog onto Fiasp if they believe the individual will benefit from changing insulins. Fiasp is also included in Novo Nordisk’s Patient Assistance Program for people with no insurance and for certain people receiving Medicare or Medicaid benefits.

Rapid-Acting Insulin Market Dynamics

• The rapid-acting insulin market has been fluctuating around $1.6 billion in quarterly sales for the last couple of years. Can Fiasp stimulate growth for the class as a whole? Year-over-year (YOY), pooled class revenue was down 7% in 1Q16, up 1% in 2Q16, down 6% in 3Q16, down 2% in 4Q16, up 14% in 1Q17, up 1% in 2Q17, and up 8% in 3Q17. Individual sales trends for NovoLog and Humalog have followed a similar pattern, reflecting similar commercial challenges: a tough US pricing environment (e.g. high payer/PBM rebates), particularly exclusive payer contracts compared to other diabetes drug classes, and increasing competition from SGLT-2 inhibitors and GLP-1 agonists. These newer therapies address postprandial glucose excursions without extra hypoglycemia risk, and indeed, we’ve heard from some HCPs that they’re prescribing mealtime insulin less and less for their patients with type 2. In 2Q17 and 3Q17, pooled GLP-1 sales matched pooled mealtime insulin sales at ~$1.6 billion; in 4Q17, the GLP-1 agonist market may surpass the rapid-acting insulin market, as it’s on track to hit at least $1.8 billion (Victoza + Trulicity + Bydureon sales for 4Q17 total >$1.7 billion already). While Fiasp is a better product than NovoLog and Humalog in its overall clinical profile, it won’t be immune to these commercial challenges, and we’ll be watching with keen interest to see how Novo Nordisk responds in marketing its next-gen mealtime insulin.
• Sanofi’s biosimilar insulin lispro Admelog will also enter the US market in 2018 (the product has launched in Europe under brand name Insulin lispro Sanofi). Presumably, Admelog will be available at a 15%-20% discount relative to Humalog in terms of list price, making it a more affordable option than NovoLog or Fiasp as well, on the surface. Again, we’ll have to wait-and-see how the biosimilar is reimbursed, as that will sway uptake more so than list price (although lower list price could improve reimbursement prospects). MannKind’s inhaled insulin Afrezza was also granted an ultra-fast claim by the FDA in October 2017. That said, Fiasp is also entering the market concurrentOther ultra-rapid-acting mealtime insulins in the competitive landscape include phase 3 candidates from Sanofi and Lilly, with trials expected to complete in January 2019 and February 2019, respectively.

Patient Perspective

• Already, we’re sensing marked enthusiasm from patients around Fiasp. In the spring of 2017, market research firm dQ&A found that 23% of respondents taking rapid-acting insulin (n=2,312) said they would “definitely” switch to Fiasp if it was suggested by their doctor and reimbursement was similar to their current mealtime insulin. An additional 55% said they would “likely” switch, and the remainder responded “unlikely” (20%) or “definitely not” (2%). Respondents on NovoLog were significantly more likely to say they would “definitely” switch (26%) vs. those on Humalog (22%) or Apidra (13%) – this makes sense in terms of familiarity with Novo Nordisk’s products and insulin pens, and it’s also fitting, since major public and private formularies tend to list one manufacturer’s insulins as preferred over any others (e.g. Novo Nordisk’s Levemir and Tresiba preferred over Sanofi’s Lantus or Toujeo on Medicare Part D). We also note that content on Fiasp is very well read on diaTribe.org.

-- by Ann Carracher, Payal Marathe, and Kelly Close