Saturday, August 21, 2021

The Insulin Business


Unlike many of the new high-priced prescription drugs, insulin is almost 100 years old—discovered in 1921 and first used by a patient in 1922. Insulin is also unique in its market structure: a persistent oligopoly both nationally and globally, in particular with respect to the prices of analog insulins. Only three companies—Novo Nordisk, Sanofi, and Eli Lilly—provide insulin the United States market, despite the existence of several other manufacturers globally. [...]

There are three categories of insulin products: animal insulins, human insulins, and analog insulins. Animal insulins, usually bovine or porcine insulin, are not available or used in the United States. Human insulins are manufactured using recombinant DNA technology: putting the gene for human insulin in bacteria and then using these bacteria to manufacture the insulin. Insulin analogs are synthetically made, modified forms of insulin. The modifications to insulin analogs change the speed at which the body absorbs the insulin. For example, rapid acting-insulins have an onset time of about 15 minutes and a peak effectiveness occurring within 1 hour; as such, individuals with diabetes must have a meal immediately after taking rapid-acting insulin or risk hypoglycemia or low blood sugar. Human insulins (also called short-acting insulins) typically have an onset time of 30 minutes with a peak of 2–3 hours. In comparison, long-acting insulins have an onset time of approximately 1–2 hours but have no significant peak, which makes them more flexible for people with diabetes to plan their day and meals around.

Insulin analogs are much more commonly used and prescribed than human insulins, in part because of their perceived novelty and superiority. They also have more predictable onset and peak times and action profiles, making them easier for individuals with diabetes, in particular Type 1 diabetes, to use and plan their meals. However, there are debates about the relative benefits of analog insulins compared with human insulins. Some studies have suggested that analog insulins are less cost-effective than human insulins. Most studies have found some benefits associated with analog insulins. Patients consistently report significant increases in quality of life from the more predictable onset and peaks associated with analog insulins. [...]

Unlike many pharmaceutical markets, which see the entry of generic competitors, no generic or biosimilar insulins have been approved in the United States. This is not due to patent protection of the existing products. The patents for the majority of human and analog insulin products have expired or are about to expire. At the end of 2015, 11 insulin products had no associated patents or exclusivities. This number has since risen to approximately 17 by July 2019 (including those products where only the insulin pen device is protected), shown in Table 2. [...]

Even though there are very few insulin products that have patent protection on the compound itself, the vast majority of insulin products still have patent protection on the pens and other devices that deliver the dose of insulin. Novo Nordisk has patents for Novolog, Novolin, and FIASP products; Sanofi has patents on the devices for all of its products; and Eli Lilly still has patents on some devices that deliver Humulin and Humalog.

The patent protection on the devices is significant. Because the pens and other insulin delivery devices can only be used on with one brand of insulin, competition on those products is effectively delayed. While a prospective competitor could develop a follow-on biologic or biosimilar of the insulin, it would have to develop its own delivery device. This may only be a partial barrier, but with the popularity of pens and pumps and the inability for interoperable devices, the device patent protection serves as a notable obstacle to competitor entry—the focus of the next part.

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