Dive Brief:
- When Novo’s Tresiba was launched in the EU, the company chose not to enter the German market, due to concerns about pricing restrictions.
- Germany, which is the largest market in Europe, has started to show more flexibility with respect to higher pricing for innovative drugs.
- Novo has decided to enter the German market and re-assess its presence there after a year.
Dive Insight:
When Tresiba (insulin degludec) was approved in the European Union in January 2013, it represented a breakthrough. This is the first insulin available in Europe at a higher than 100 unit/ml strength; it is available in both 100- and 200-unit dosages. Considering the fact that many patients need higher levels of insulin to achieve glycemic control, analysts consider this product both innovative and a potential blockbuster. In fact, they estimate that it could gross $3 billion a year in the European market.
Despite this outlook, Novo Nordisk chose not to launch its new insulin product in Germany, the largest market in the EU. Their conservative pricing policies have made other companies, such as Eli Lilly, shy away as well. Since 2011, the German policy has been to allow a company to launch a drug for a year, during which time regulators compare it to similar drugs. If the drug is not considered innovative or significantly better than other therapeutic options, then pricing is adjusted down. Novo has chosen to enter the market due to signs of liberalization within the German market with respect to higher pricing for more innovative products.