Friday, the FDA approved Novo Nordisk’s Rybelsus—or, as industry watchers know it, oral semaglutide—to control blood sugar in Type 2 diabetes patients. And with the drug boasting stellar data and head-to-head study wins against top products in the field, the green light is expected to majorly shake things up.
“This ability to now deliver a GLP-1 and harness the power of a biological medicine in a single, once-daily tablet—that is a unique thing. It’s never happened before,” Novo’s chief scientific officer, Mads Krogsgaard Thomsen, said ahead of the approval, adding, “it’s a little bit like a holy grail.”
Novo has not shared Rybelsus' list price, but the drug "will be competitively priced within the GLP-1 category," a company spokesman said by email. "Novo Nordisk is committed to working with health insurance companies and pharmacy benefit managers to ensure broad coverage and patient access for Rybelsus," he added.
The go-ahead—hastened by a priority review voucher Novo used in March—comes on the back of a seemingly endless stream of positive data from the company's Pioneer clinical trial program. Rybelsus has also topped meds including Eli Lilly and Boehringer Ingelheim's SGLT2 med Jardiance, Merck's DPP-4 Januvia and Novo’s own elder GLP-1 Victoza in direct showdowns.
With those results in mind, the industry has been waiting for Novo’s pricing decision with bated breath. Last summer, CEO Lars Fruergaard Jørgensen said the company was weighing pricing the drug in the range of injectable GLP-1s versus pricing it as a tablet, which is more expensive to produce.
Meanwhile, analysts including Bernstein’s Wimal Kapadia predicted that if Novo went with a price representing a small premium to existing oral options, payers could use the drug to drive additional discounts on its competitors.
“The payers' ability to use it as a tool to squeeze in the branded orals and injectable GLP-1s will likely come down to price,” Kapadia said in a March note to clients.
The Institute for Clinical and Economic Review (ICER), on the other hand, assumed Novo would go for a bigger premium, earlier this month assigning it an annual list price of $6,520—well above the $2,088 price tag on BI and Lilly’s Jardiance, and even above the $5,342-per-year sticker on Victoza—in a draft report. At that price, the U.S. cost watchdog said, the pill couldn’t touch the SGLT2 product when it came to cost-effectiveness.
Still, Wall Street expects immense success for the drug, which would be clutch for hard-hit Novo. The Danish drugmaker has suffered under U.S. competition from GLP-1 rivals to its standby Victoza—including from Eli Lilly’s Trulicity—as well as years of payer pressure, resulting in discounting of 68% across the company’s U.S. portfolio last year.
The approval follows close on the heels of the European Association for the Study of Diabetes (EASD) annual meeting, which wrapped Friday in Barcelona. And there, the excitement over Rybelsus was palpable, Novo CSO Thomsen said.
“We’ve had so many presentations on the oral version of semaglutide, and I was amazed to see that even when it had been presented one day, then there was a new symposium and that was a full house, with more than 2,000 people sitting there enthusiastically listening,” he said.
Novo is still awaiting word from the FDA on a second Rybelsus indication for reducing the risk of major cardiovascular events among high-risk Type 2 diabetes patients. The company expects that decision from regulators in Q1 of next year.