Novo Nordisk CEO Lars Fruergaard Jorgensen knows that his company is facing pressure in the US over the rising price of the diabetes medication insulin. Jorgensen told Business Insider that he expects that people who have trouble paying for insulin might get some relief soon – it’s just going to take longer than expected, in part because of the national US healthcare debate.
One of the world’s largest diabetes drugmakers has figured out how to weather increased scrutiny over the price of insulin.
Novo Nordisk’s stock was up 8% on Wednesday after it released its earnings that showed the company made $2.1 billion in operating profit in the second quarter of 2017. It’s a better result than the company had in October 2016, when the company cut its long-term profit growth target. That day, the stock fell 14%.
Novo Nordisk CEO Lars Fruergaard Jorgensen told Business Insider that he attributed that in part to a new long-acting insulin called Tresiba, which has been gaining a bigger share of the market from older versions of the drug.
Novo Nordisk has faced scrutiny over the price of insulin, a drug used to help people living with diabetes manage their blood sugar levels. The company, along with other insulin-makers have been under fire from the public and politicians including US Senator Bernie Sanders. The drugmakers were recently the target of a law in Nevada that aimed to increase drug pricing transparency around insulin and other diabetes medications.
The list prices for insulin have been increasing over the past few decades. In the last decade alone, the prices of short-acting insulins Humalog and Novolog (made by Novo Nordisk) have increased 290%. It’s something that patients, who are dependent on insulin, are starting to feel as high deductible plans become increasingly common.
At the same time, Novo Nordisk has been facing pressure to provide bigger rebates to middlemen, called pharmacy benefit managers. So even as the list price increases, Novo Nordisk said average prices are expected to fall in 2018. Those rebates don’t usually make it to patients that have high deductibles.
Ultimately, Jorgensen said he does expect something to give.
“It’s changing slowly,” he said. That’s in part because there’s so much uncertainty around what the US healthcare system will look like. “I think all the political discussions around the US healthcare system means that there’s a bit of ‘wait and see.'”
In the meantime, Jorgensen said he’s working with PBMs to come up with ways to make sure patients aren’t paying the full price for insulin. For example, in March, Novo Nordisk and CVS Caremark, a PBM, started offering older versions of insulin for $25, roughly $100 less than the list price.
“I think there will be changes,” he said. “I don’t think they’re coming as fast as someone might hope from a patient point of view.”
- Markets Insider