Drugmakers turn up marketing efforts in diabetes market

Back to TopCommentsE-mailPrintBookmark and Share

Drugmakers led by Novo Nordisk A/S and Merck & Co. are increasing sales efforts for their top-selling diabetes drugs to grab as much of the market as possible ahead of a wave of new therapies.

At the start of this year, Novo, the world’s biggest maker of insulin, directed its sales force to boost promotion of the company’s drug Victoza. Soon after, revenue slowed for competing treatments from Merck and Bristol-Myers Squibb Co., forcing those companies to put more resources behind their medicines and overhaul their strategies.

With a half-dozen new products lined up for approval within two years, the fight to win the growing $22 billion U.S. diabetes market will only intensify, said Michael Leuchten, a Barclays Plc analyst. By expanding sales forces and spending more on educating doctors, the top companies in diabetes are working to more strongly establish brand loyalty.

“It’s going to be a push for market share and somebody’s going to get squeezed,” said Leuchten, who is based in London. While drugs used in the pre-insulin stages of diabetes may work differently, “they’re all competing for the same patients.”

Meanwhile, Indianapolis-based Eli Lilly and Co. vows to take a comprehensive approach to the fight against diabetes instewad pof pushing just one treatment.

There were 26 million Americans with diabetes in 2011, an increase of 2 million from 2007, according to the U.S. Centers for Disease Control and Prevention. People with diabetes fail to produce insulin or their body doesn’t use the hormone properly to convert blood sugar into energy, leaving blood sugar levels too high without treatment.

Merck’s Januvia, Bristol-Myers’ Onglyza and Lilly’s Tradjenta are DPP-4 inhibitors. The drugs cause the pancreas to make more insulin and cut sugar produced by the liver. Victoza and Bristol-Myers’ Bydureon and Byetta are in a class called GLP-1 receptor agonists. The drugs spur the body to make more insulin when blood sugar rises, and can also cause weight loss.

Recent therapies

Newer drugs, called SGLT2 inhibitors, cause the kidneys to cut excess blood sugar. New Brunswick, N.J.-based Johnson & Johnson’s Invokana, approved by the U.S. Food and Drug Administration in March, and Bristol-Myers’ Forxiga belong to this class. Lilly and Boehringer Ingelheim GmbH, AstraZeneca Plc and Bristol-Myers, and Merck and Pfizer Inc. are developing related medicines, now in the final stages of testing.

Last year, Novo increased its U.S. sales force 25 percent to introduce a diabetes product called Tresiba. When that drug was rejected by the FDA in February, the Bagsvaerd, Denmark- based company refocused the sales workers on Victoza, raising its revenue by more than a third, to $474 million, and cutting into sales of Merck’s Januvia, first-quarter revenue of which fell 4 percent, to $884 million, from a year earlier.

Merck’s response

Merck responded by having more of its sales representatives focus solely on pushing Januvia, the first in a new class of medicines when it entered the market in 2006. The company also boosted spending on doctor education efforts, and last month Whitehouse Station, N.J-based Merck signed a co-promotion deal with Avanir Pharmaceuticals Inc. to reach patients in nursing and long-term care homes.

“This is the No. 1 priority for Merck in the U.S. and around the world,” Frank Clyburn, Merck’s president of primary care and women’s health, said in a telephone interview. Januvia is the top drug for the company, the second-biggest U.S. drugmaker, and dominates the class with 73 percent of the market for DPP-4 inhibitors.

Bristol-Myers’ changes

Bristol-Myers, which co-promotes its diabetes drugs with London-based AstraZeneca, replaced the head of its U.S. diabetes business, Mark Pavao, a decade-long company veteran, nine months after he had been given control of the unit, according to an online resume. In his place, it hired Richard Daly, a former executive at Takeda Pharmaceutical Co., said Ken Dominski, a spokesman. Dominski declined to comment on the company’s strategy.

Onglyza and a related drug, Kombiglyze, generated $202 million in sales for New York-based Bristol-Myers in the first quarter.

“We along with our partner AstraZeneca recognize the need to adequately resource this business and execute better,” Charles Bancroft, Bristol-Myers’ chief financial officer, said on a July conference call.

Merck’s increase in promotional spending hurt Bristol- Myers’ partner, AstraZeneca, as well, said AstraZeneca CEO Pascal Soriot. After Novo started promoting Victoza harder, “the same increase in promotion behind Januvia was applied by Merck,” Soriot said on an Aug. 1 conference call. “Suddenly, the promotional pressure has increased and the market growth is a little bit slower.”

Obesity effect

The U.S. market for diabetes is projected to grow as obesity rates increase and more Americans are diagnosed with the disease. Patients typically start on a generic drug such as metformin, then progress to other medications before they eventually may need insulin injections.

“Within the DPP-4s and GLP-1s, we’re going to continue to see a race to arms or at least an increase of effort, because that market is massive and will continue to grow,” Leuchten said.

New medicines will also pressure Januvia. It will be a sales push, though, not because one drug is that much better than another, said Valentina Gburcik, an analyst with market research firm GlobalData who follows the industry.

“The pipeline is filled with me-too drugs, and nothing revolutionary in the next 10 years,” Gburcik said in a telephone interview. “All those me-too drugs will take some share, and it’ll be a marketing battle between the companies.”

Lilly, which hasn’t boosted marketing efforts of its diabetes medicines, says it expects to be able offer a drug in each part of the pre-insulin market, as well as its insulin products.

Full portfolio

“We will be the only company that can claim to have a complete, broad offering,” Enrique Conterno, president of Indianapolis-based Lilly’s diabetes unit, said in a telephone interview. “Instead of trying to push a brand, we’re starting the discussion with the physician and the patient and what’s the best solution.”

In the future, a key product will be pills that combine two or more of the different types of drugs. Lilly is developing combination pills of Tradjenta and its experimental compound empagliflozin, Conterno said. Merck made a deal in April to develop a combination of Januvia with Pfizer’s ertugliflozin that may compete with Lilly’s combination product.

“Polypharmacy is the way to go,” said Marshall Gordon, a New York-based analyst with Legg Mason Inc.’s ClearBridge Investments affiliate.


Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ
  1. How can any company that has the cash and other assets be allowed to simply foreclose and not pay the debt? Simon, pay the debt and sell the property yourself. Don't just stiff the bank with the loan and require them to find a buyer.

  2. If you only knew....

  3. The proposal is structured in such a way that a private company (who has competitors in the marketplace) has struck a deal to get "financing" through utility ratepayers via IPL. Competitors to BlueIndy are at disadvantage now. The story isn't "how green can we be" but how creative "financing" through captive ratepayers benefits a company whose proposal should sink or float in the competitive marketplace without customer funding. If it was a great idea there would be financing available. IBJ needs to be doing a story on the utility ratemaking piece of this (which is pretty complicated) but instead it suggests that folks are whining about paying for being green.

  4. The facts contained in your post make your position so much more credible than those based on sheer emotion. Thanks for enlightening us.

  5. Please consider a couple of economic realities: First, retail is more consolidated now than it was when malls like this were built. There used to be many department stores. Now, in essence, there is one--Macy's. Right off, you've eliminated the need for multiple anchor stores in malls. And in-line retailers have consolidated or folded or have stopped building new stores because so much of their business is now online. The Limited, for example, Next, malls are closing all over the country, even some of the former gems are now derelict.Times change. And finally, as the income level of any particular area declines, so do the retail offerings. Sad, but true.