Novo Nordisk Bets on Riskier Insulin Research
The move would bring the Danish pharmaceutical company closer to the risky drug-discovery activities of the wider pharmaceutical industry
Nearly 10 years ago, executives at Novo Nordisk A/S wondered whether the company’s decadeslong quest to make ever-better insulin had finally come to an end.
The trigger was an impressive set of results for the company’s newest insulin that suggested the product would be difficult to improve upon.
“We just sat there and said, ‘Wow,’ ” research chief Mads Thomsen recalled of the meeting where he and other executives saw the results. “We had kind of realized we were very close to perfection.”
That realization has forced a gear change at Novo Nordisk, the world’s largest insulin maker. For most of its history, the publicly held Danish company, which is valued at about 700 billion Danish kroner ($105 billion), relentlessly re-engineered the same basic medicine.
Now, it is getting into the complex and more expensive business of inventing new forms of insulin, bringing it closer to the riskier drug-discovery activities of the wider pharmaceutical industry.
In Novo Nordisk’s favor is the sheer scale of the diabetes epidemic, which affects one in 11 adults world-wide and is rising. At the same time, it is grappling with increasingly intense competition—its biggest rival in the insulin market is France’s Sanofi SA—and consumers who are less willing or cannot afford to pay premium prices for incremental improvements.
That tougher environment is reflected in Novo Nordisk’s approach to launching its latest insulin, Tresiba, in the U.S.
Its list price, at $443.85 for 15ml, according to Truven Health Analytics, is 10% higher than the equivalent volume of its predecessor Levemir. That is low by historic standards: Levemir sold at a 43% premium to its predecessor when it launched 10 years ago, according to Jakob Riis, who runs Novo’s North American operations.
Health plans and employers typically pay a discount to the list price.