Lilly execs: Net price pressures not a concern for new diabetes meds

Eli Lilly

Eli Lilly is counting on its diabetes unit to carry it to revenue growth. But don’t worry, execs told investors Friday: It can get there, and pricing pressure isn’t going to stop it.

Lilly isn’t worried about net price concerns for its newer products, diabetes VP Mike Mason said on a conference call. If there’s an area where it has any concerns at all, it’s in the “more mature” products, he said.

Take insulin Humalog, which won FDA approval 20 years ago: There, the Indianapolis drugmaker has been able to get about 1% to 2% of annual growth on net price.

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But with the company’s newer products? “I think the pressures are a little bit different than that, and we continue to get good growth,” he said.

That bodes well for SGLT2 med Jardiance, for which Lilly “anticipates net price dynamics will be less of a factor” than the overall market and market-share growth, Evercore ISI analyst Mark Schoenebaum wrote in a Friday note to clients.

And as far as market-share growth, Lilly thinks it’s sitting pretty. Last year in an outcomes trial, Jardiance showed it could lower the combined risk of heart attack, stroke and cardiovascular death in high-risk Type 2 diabetes patients--something its in-class rivals, Invokana from Johnson & Johnson and Farxiga from AstraZeneca won’t be able to do until at least 2017 and 2019, respectively.

And now, Lilly sees an update to Jardiance’s label--and an update to treatment guidelines from bodies such as the American Diabetes Association--in its future. Both of those events should offer sales boosts, it figures, especially since a label change will open the doors for Lilly’s reps to start talking up the data with docs.

“We will obviously put the right level of promotion behind that product,” execs said on the call, noting that the company has “what we need to be successful.”

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