Novo combats talk of insulin price war with 'moderate premium' on brand-new Tresiba

Novo Nordisk ($NVO) has been toiling for years to get its long-acting basal insulin Tresiba to the U.S. market. Rebuffed by the FDA the first time around, Novo had to stay on the sidelines as archrival Sanofi ($SNY) launched its competitor, Toujeo, in April.

Now, Tresiba has its chance.

Cleared for liftoff on Friday, alongside a combo drug Ryzodeg, Tresiba can now go up against Toujeo, armed with a raft of data on its heart safety--and some head-to-head studies against Sanofi's longtime mainstay, Lantus.

What Novo won't have is the sort of FDA label that might have given Tresiba an immediate marketing edge. Though the drugmaker had generated data showing that Tresiba triggered fewer episodes of hypoglycemia--a common side effect of insulin therapy--the FDA didn't include that in its Tresiba approval.

Now, the race is on to gain market share before Sanofi's market-dominating Lantus sees a biosimilar version make its debut. Toujeo has a head start of almost 6 months, and, in addition to the fact that its reps have been on the streets nonstop since then, that head start means Sanofi is about ready to roll out direct-to-consumer advertising.

Novo will have to wait out the traditional 6 months before advertising its med to the public. But as Bernstein & Co. analyst Ronny Gal points out in an investor note, the Danish drugmaker's "investment in marketing and sales has been extensive"; indeed, the company hired hundreds of new reps in anticipation of Tresiba approval the first time around, and those reps have been touting other Novo meds in the meantime. Now, the company figures that doctors will support Tresiba uptake and that it will gain traction in the market soon enough.

One area where Novo doesn't plan to compete with Toujeo--at least not publicly--is on price. Tresiba will be priced at "a moderate premium" to Novo's older basal insulin Levemir and Sanofis Lantus, Gal says, citing Novo officials. Sanofi priced Toujeo on par with Lantus. In both cases, analysts had predicted lower pricing as a move to gain market share quickly from the older meds.

That's not to say that U.S. payers won't be pitting Sanofi and Novo against each other for discounts. A pricing war could go on behind the scenes, with the major payers and pharmacy benefits managers at least. But apparently Novo is counting on early adoption by smaller, "more permissive" healthcare plans--and on its ability to persuade other payers of Tresiba's worth-the-price superiority in negotiations next year.

Novo's statement on the FDA approval hinted at how the company will position Tresiba in the field. "[W]e are proud to bring forward the first new basal insulin molecule to be approved by the FDA in 10 years," Novo's U.S. chief, Jesper Høiland, said in a statement, adding that the company is excited about the drug's official launch in the first quarter of 2016. The company will make Tresiba available immediately, however, Gal said, citing Novo officials.

- read the Novo release

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