Lilly gets good news on insulin

Back to TopCommentsE-mailPrintBookmark and Share

Pfizer Inc.’s decision last week to abandon its generic insulin project is good news for Eli Lilly and Co.

It demonstrates that there are high barriers to the insulin market, from which Lilly derives more than $3.6 billion per year. And it gives Lilly more reason to hope its insulin revenue will keep growing even after it loses U.S. patent protection on its best-selling Humalog brand in 2013.

That’s important for Indianapolis-based Lilly because it is in the midst of losing patent protection on four other blockbuster drugs, which collectively will sap it of more than $10 billion in annual revenue.

Medicine for diabetes, a disease growing rapidly around the world, could provide a revenue boost for Lilly as it tries to bring new drugs to market.

“Although the insulin market should be highly attractive to the pharma industry, competition seems to be decreasing, rather than the opposite,” Lars Hevreng, an analyst at Denmark-based SEB Enskilda, wrote in a March 13 report. Enskilda follows Denmark-based Novo Nordisk A/S, which is the global leader in the insulin business.

New York-based Pfizer, the world’s largest pharma company, in October 2010 announced a partnership with India-based Biocon Ltd. to make and sell generic versions of mealtime and once-a-day insulins in Europe as early as this year and in the United States as early as 2015.

But after spending more than $200 million, Pfizer called it off.

"The companies have agreed that, due to the individual priorities for their respective biosimilars businesses, it is in their best interest to move forward independently," Pfizer and Biocon said in a joint statement issued March 13.

Global insulin sales total $18 billion a year, with just $3 billion of that claimed by generics, Hevreng noted.

In the United States, the 2010 health care reform law allowed, for the first time, generic equivalent versions of biotech drugs, which insulins are. The rules fleshing out the law have yet to be finalized, although the U.S. Department of Health and Human Services released draft rules in February.

Greenwood-based Elona Biotechnologies Inc. has been building a $28 million plant in order to manufacture generic insulin. It is run by Ron Zimmerman, a former Lilly researcher.

Some European countries already have regulatory pathways for generic biotech drugs, which are called biosimilars. But the paucity of generic competitors has propped up sales of some drugs that saw their patents expire long ago, such as Lilly’s Humulin, which lost its U.S. patent in 2000.

Last year, Lilly sold $1.3 billion of Humulin and $2.4 billion of Humalog. Wall Street analysts generally do not predict a drop-off in Humalog revenue even after its patent expires in 2013. And most predict flat sales for Humulin, even as late as 2017.

“We do believe that they’re going to come to the market in the U.S., sometime in the future,” Enrique Conterno, president of Lilly’s diabetes division, said of generic insulins, in a December interview.

But he added that Lilly expects the U.S. government to require some clinical testing of generic insulins—something typically not required for generic versions of chemical drugs. That raises the cost of entry.

Conterno also expects that generic insulins will not be regarded as “highly interchangeable,” meaning makers of generic insulins could not rely on pharmacists to automatically substitute cheaper generics when a physician prescribed one of the brand-name insulins.

If that proves to be the case, makers of generic insulin would also need a sales and marketing team to promote their versions of insulin.

For those reasons, Conterno said of generic insulins, “We don’t believe that they’re going to be highly successful.”


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. Of what value is selling alcoholic beverages to State Fair patrons when there are many families with children attending. Is this the message we want to give children attending and participating in the Fair, another venue with alooholic consumption onsite. Is this to promote beer and wine production in the state which are great for the breweries and wineries, but where does this end up 10-15 years from now, lots more drinkers for the alcoholic contents. If these drinks are so important, why not remove the alcohol content and the flavor and drink itself similar to soft drinks would be the novelty, not the alcoholic content and its affects on the drinker. There is no social or material benefit from drinking alcoholic beverages, mostly people want to get slightly or highly drunk.

  2. I did;nt know anyone in Indiana could count- WHY did they NOT SAY just HOW this would be enforced? Because it WON;T! NOW- with that said- BIG BROTHER is ALIVE in this Article-why take any comment if it won't appease YOU PEOPLE- that's NOT American- with EVERYTHING you indicated is NOT said-I can see WHY it say's o Comments- YOU are COMMIES- BIG BROTHER and most likely- voted for Obama!

  3. In Europe there are schools for hairdressing but you don't get a license afterwards but you are required to assist in turkey and Italy its 7 years in japan it's 10 years England 2 so these people who assist know how to do hair their not just anybody and if your an owner and you hire someone with no experience then ur an idiot I've known stylist from different countries with no license but they are professional clean and safe they have no license but they have experience a license doesn't mean anything look at all the bad hairdressers in the world that have fried peoples hair okay but they have a license doesn't make them a professional at their job I think they should get rid of it because stateboard robs stylist and owners and they fine you for the dumbest f***ing things oh ur license isn't displayed 100$ oh ur wearing open toe shoes fine, oh there's ONE HAIR IN UR BRUSH that's a fine it's like really? So I think they need to go or ease up on their regulations because their too strict

  4. Exciting times in Carmel.

  5. Twenty years ago when we moved to Indy I was a stay at home mom and knew not very many people.WIBC was my family and friends for the most part. It was informative, civil, and humerous with Dave the KING. Terri, Jeff, Stever, Big Joe, Matt, Pat and Crumie. I loved them all, and they seemed to love each other. I didn't mind Greg Garrison, but I was not a Rush fan. NOW I can't stand Chicks and all their giggly opinions. Tony Katz is to abrasive that early in the morning(or really any time). I will tune in on Saturday morning for the usual fun and priceless information from Pat and Crumie, mornings it will be 90.1