Novo Nordisk to withdraw Tresiba (insulin degludec) from German market – July 2, 2015

Novo Nordisk announced yesterday that it will cease distribution of the ultra-long-acting basal insulin Tresiba (insulin degludec) in Germany as of the end of September. This is the result of a decision by an arbitration board on the recommendation of the GKV-Spitzenverband (the national association of health insurance funds) to price Tresiba at the same level as human insulin. In the press release, Novo Nordisk Executive Vice President Jakob Riis expressed deep sadness about the decision but stated that acquiescing to the German pricing demands would have excessively undermined the company’s ability to support future R&D. This outcome is not unexpected given the assessment from Germany’s IQWiG (Institute for Quality and Efficiency in Health Care) last August and the final decision by the G-BA (Joint National Committee) last October that Tresiba offered no added benefit over existing options; such decisions typically relegate drugs to generic-level pricing. Poor reimbursement until now has hampered Tresiba’s performance in Germany since its launch approximately a year ago – as of Novo Nordisk’s 1Q15 update, the product accounted for less than 1% of the total diabetes market and ~9% of the basal insulin market there, whereas uptake has topped 25% in markets like Switzerland and Japan where Tresiba is reimbursed at a comparable level to Sanofi’s Lantus (insulin glargine).

This disappointing news is the latest in a series of challenges that new diabetes drugs have faced in Germany in recent years – see the table below for a detailed overview. We imagine that this decision could potentially prompt more backlash compared to past withdrawals or non-launches of drugs in classes where alternative therapies are still reimbursed. For example, while several DPP-4 inhibitors and SGLT-2 inhibitors have been withdrawn in response to IQWiG/G-BA decisions, German patients still have access to Merck’s Januvia (sitagliptin) and (after a lengthy re-arbitration process) AZ’s Forxiga (dapagliflozin). In Tresiba’s case, patients will now be deprived of a novel basal insulin that is available elsewhere in Europe is perceived as a meaningful improvement over existing options. This decision also has more relevance for children with diabetes, as Tresiba is more likely to be used by children (predominantly type 1) than would an oral glucose-lowering drug; this could increase the potency of a potential political backlash.

However, we recently learned that Sanofi’s Toujeo (insulin glargine U300) did not have to undergo the G-BA/IQWiG process for determining reimbursement (it was grandfathered in because it has the same active ingredient as Lantus). If Toujeo is fully reimbursed, it could defuse potential frustration among patients and providers about lack of access to Tresiba, though we believe patients would be better served by a wider set of options. This could be a major advantage for Sanofi not having to compete with Novo Nordisk’s Tresiba, though we have not yet heard details on how Toujeo will be priced.

• For context, basal insulin analog prices are quite low in Germany due to government negotiations. Dr. Irl Hirsch (University of Washington, Seattle, WA) addressed this disparity in his excellent talk at ADA this year on insulin prices, noting the differences in retail price for a Lantus box of five between the US ($386) and Germany ($102). Previously, G-BA attempted to sharply restrict the use of insulin analogs for type 1 diabetes, one of the few decisions that prompted a major political backlash and subsequent G-BA reversal.
• As an additional challenge beyond the low baseline for insulin prices in Germany, Novo Nordisk has steadfastly pursued a large premium for Tresiba across geographies. Tresiba is priced at a ~60%-70% premium over Levemir in the UK, with prices in the rest of Europe “more or less at the same level,” according to the company. That is a higher premium that we have seen elsewhere in the world (Tresiba holds only a 4% premium in Japan) but this is a correction for the depressed insulin prices in Europe. As we heard first from CEO Mr. Lars Sørensen back during Novo Nordisk’s 3Q13 update, the company sees the premium as the principled move; Mr. Sørensen stated that Europe cannot expect the US to fund innovation for the rest of the world, and that the premium for Tresiba is proportionate to its degree of clinical benefit. We see the effort to reduce the disparity in insulin prices between the US and other developed countries as worthwhile to promote fairness. More parity in pricing also avoids putting all of insulin manufacturers’ eggs in one geographic basket – a basket that is starting to see increased pricing pressure itself.
• The German AMNOG saga offers an extreme example of the general trend toward increased price pressure for new diabetes drugs. The current system, in which reimbursement for novel drugs is tied to demonstration of benefit vs. standard of care, was created under the AMNOG law in 2010 in response to rising prescription drug prices. While addressing soaring medications costs is a crucial goal for healthcare systems, in practice, this particular approach has created more of an uphill battle for drugs that treat chronic diseases like diabetes for which the metrics for demonstrating benefit are less clear. In addition, many of IQWiG’s negative rulings have been due to technical objections to the phase 3 trial program rather than true comparative efficacy assessments; in Tresiba’s case, IQWiG cited missing information from the submitted dossier as the main reasons for the negative ruling. See our report on IQWiG’s decision for GSK’s Eperzan (albiglutide) for more background and commentary on this system’s impact on the diabetes drug landscape. Also, check out our coverage of a presentation from a G-BA representative from this year’s ATTD – he seemed to accept the current situation and suggested that most patients do as well.

Table 1: Recent IQWiG/G-BA Rulings for Diabetes Drugs

-- by Emily Regier, Manu Venkat, and Kelly Close