As Sales of Weight Loss Drugs Skyrocket, the Insulin Market Falters
15 May 2024
Drug Approval
Pictured: Collage of a man injecting insulin, money, syringes, and injector pens/Taylor Tieden for BioSpace
When the Inflation Reduction Act rolled out in January 2023, a key tenet of the legislation was the associated Affordable Insulin Now Act, which caps the price of insulin products at $35 per month for Medicare Part D enrollees. Two months later, Novo Nordisk announced that in response, the firm was going to chop the cost of various insulin products by up to 75%. By November, however, Novo changed its tune: Instead of lowering insulin product Levemir by 65%, the firm announced that it was discontinuing the medication instead. Both FlexPens and vials will be completely off the market by the close of 2024.
“[Novo] can’t make a product they’re losing money on, which may be the case with some insulins, and at some point they need to be smart with capital,” BMO Capital Markets analyst Evan Seigerman told BioSpace.
Meanwhile, Q1 sales across the Novo portfolio increased 24% year-over-year with quarterly revenue of $9.37 billion due to the sky-high sales of GLP-1 drugs Ozempic and Wegovy, approved for type 2 diabetes and weight loss, respectively.
In a similar move, weight-loss competitor Eli Lilly also slashed the cost of insulin drug Humalog by 70% to cost patients approximately $25 per vial. Then in March, the company reported that it was facing Humalog manufacturing constraints and warned that it may be temporarily out of stock of the drug by early April, though so far no shortages have been reported.
Also like Novo, Lilly reported strong sales of its GLP-1 weight-loss drug, Zepbound, which was approved last November. In Q1 2024, Zepbound’s first full quarter on the U.S. market, sales of $517.4 million beat analysts’ expectations of $373 million. While below Wegovy’s $1.34 billion in Q1 sales, new Zepbound prescriptions now outpace Wegovy scripts. Lilly also saw continued strong sales of Mounjaro, its GLP-1 for type 2 diabetes.
With such strong sales of GLP-1 drugs, questions arise about how crackdowns on insulin pricing will influence pipeline strategies and if pharma firms have a social responsibility to produce insulin, even at a loss. Moreover, if GLP-1s prevent obesity and diabetes on a mass scale, will insulin stay in such high demand?
Does Levemir’s Withdrawal From Market Really Matter?
Novo decided to discontinue Levemir in the U.S. “due to a combination of factors,” according to comments emailed to BioSpace, “most notably global manufacturing constraints, significant insurance formulary losses impacting patient access effective in January 2024 . . . as well the availability of alternative options in the U.S. market.”
Manny Jurado, principal at the life sciences consulting Dedham Group who works with both biopharma and digital health clients in the GLP-1 and insulin space, added that the complexity of the American healthcare system also played a role. “In the U.S., we definitely live in a higher complexity healthcare ecosystem driven by factors like private insurance and . . . vertically integrated organizations like Cigna-ESI [and] Aetna-CVS, which pretty much touch every aspect of healthcare at this point,” Jurado told BioSpace.
Considerations like differing state and federal regulations, as well as socioeconomic diversity of patients, makes it challenging for any pharma company to successfully launch their product to the American masses, Jurado said. As for insulin as a product, he said that there are other long-lasting insulins on the market, such as Tresiba, Lantus and Toujeo, among others, so patients are not being left without any insulin at all.
However, with pricing caps, the availability of those existing insulins may also change in the future. “I believe manufacturers will continue to re-evaluate their strategic approaches to insulin as supply continues to be an issue,” Jurado said.
How Are the GLP-1 and Insulin Markets Connected?
Jurado said that few drugs have ever gripped the American public like GLP-1 weight-loss drugs. With all of that media noise and accompanying sales, critics of discontinuing Levemir have questioned whether sales of Novo’s Wegovy and Ozempic could have helped subsidize its production.
Seigerman said that when it comes to the strength of GLP-1 sales, there is more that meets the eye. “Yes, on a per-product basis, Wegovy, Ozempic, Mounjaro, and others are profitable,” he said. “[But] you have to remember to get to where these products are now, billions upon billions of dollars were invested. It takes time to recoup; it’s not just the cost of goods.”
For now, Seigerman sees the question of GLP-1 success as a completely separate equation from insulin pricing and supply. “Insulin is unique,” he told said. “These products cost money to make, and [Medicare paying] $35 a month is never going to be able to recoup the cost [of production].” If Levemir were reimbursed at a more appropriate rate for the investment, Seigerman argued, the drug may not have been discontinued.
Seigerman added that the price caps also discourage drugmakers from developing insulin biosimilars. He noted that there are no biosimilars for Levemir—and that, he said, is the real problem in discontinuing the drug. “There should be biosimilars for these [insulins], and that begs the question of why there’s not.”
Future Entanglement of GLP-1s and Insulin Sales
Seigerman predicted that the rise of GLP-1s in popularity may impact the rates of diabetes and thus the need for insulin products because there is a “big overlap” between the obese population and diabetes patients. However, he said that it’s too early to tell how these markets will influence each other, and it may take a decade-plus for any such interplay to come to fruition.
Jurado acknowledged the common links between obesity, diabetes and cardiovascular indications, along with other chronic conditions that GLP-1s address, but emphasized that it’s not enough to trigger a massive phase-out of insulin. “There will always be a strong need for insulin,” he said.
Jurado said that drug manufacturers have social responsibility to people with diabetes—and that most recognize this. “I think these insulin manufacturers acknowledge that these drugs are truly life-time chronic [ones] and are finding ways to continue to support these patients and keep up with supply, despite these manufacturing challenges,” he said.
As for the withdrawal of Levemir, Seigerman is of the firm belief that Novo was justified in its decision and not at fault for the lack of a biosimilar. “In the world of pharma, if you have products losing money with no strategic benefit, you have to look at your portfolio and say, is this how we want to use our limited resources? You have to make capital allocation decisions in R&D, manufacturing, and getting the appropriate products to the right patient every time.”
Karen Fischer is a freelance science writer based in New Mexico. Reach her at kfischerwrites.com.
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