PRMA Insights: The Roadmap to Pricing and Reimbursement Success

Type 2 Diabetes

Type 2 diabetes is reaching epidemic proportions in both the developed world and in emerging markets. Diabetes currently affects some 285 million people worldwide and this number is expected to increase to 438 million by 2030.

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Diabetes has been one of the leading therapy areas by value over the last 10 years. The market has grown by a compound average growth rate of nearly 20%, from about US$4 billion in 1995 to over US$27 billion in 2008 and it is expected to continue to experience double-digit growth in the future. This growth is primarily driven by the increasing prevalence of type 2 diabetes, which is predicted to rise from the current rates of 4.5% in the UK and 12% in the US to 5.4% and 14% respectively in 2030, as well as the high number of new products that are expected to come into the market in the near future. Currently, there are more than 250 drugs in clinical development seeking an indication for type 2 diabetes.

Diabetes is more than just an elevation of blood glucose. In the long term, uncontrolled blood glucose results in a host of serious complications, including cardiovascular disease, renal failure, vision loss, and neuropathy leading to limb amputations and despite the available treatments for type 2 diabetes, high unmet clinical needs still exist. Globally, approximately 4 million deaths are attributed to diabetes in those aged 20–69 years, while treating diabetes and its complications has been estimated to cost US$376 billion, half of which is spent in the US alone. Moreover, there is a need for new products that provide a balance between a long-term effective blood glucose control, an improved side-effect profile and a convenient mode of administration.

Older, generic treatments still play a significant role in the treatment of type 2 diabetes and they are the preferred first-line options making them the natural comparators in the health technology assessments (HTA) of new products. Metformin is the gold-standard oral therapy and the first treatment option for type 2 diabetes, with the exception of Japan. Then sequential addition of other oral anti-diabetic dugs and insulin may be added at any time after metformin. The cheap human neutral protamine hagedorn (NPH insulin) is the favored starting insulin according to most guidelines. Evaluating agencies have concluded that there is no clinical or outcome difference when NPH is compared with the newer long-acting insulin analogs, hence reimbursement of the latter is usually restricted only to specific sub-populations. Similarly, most new therapies have only demonstrated therapeutic non-inferiority to the product they are seeking to displace, making favorable HTA decisions and positioning challenging.

Therefore, diabetes offers an attractive commercial opportunity for pharmaceutical and biotech companies only if key market access challenges can be surmounted. Requirements differ across the major markets, but one trend is clear: although payors are willing to provide access to medicines for type 2 diabetes with the aim of preventing the development of costly and life-threatening complications, the evidence requirements for achieving reimbursement and broad market access are increasingly demanding. Failing to provide the appropriate evidence to payors will result in some countries granting only partial or no reimbursement. Therefore, selection of the appropriate comparators in pivotal clinical trials, demonstration of superiority on efficacy or safety parameters and collection of relevant data to support compelling evidence-based payor value propositions are required to achieve a premium price and to stimulate use at an earlier stage of the treatment paradigm.

Generating an evidence package consistent with manufacturers’ pricing and commercial ambitions requires early planning (Phase II or earlier) and broad cross-functional cooperation. Failure to adequately plan and invest in the market access strategy could lead to commercially disastrous consequences including lower achievable price, smaller-than-planned reimbursed population, and extensive market access delays.

PRMA Insights: The Roadmap to Pricing and Reimbursement Success in Type 2 Diabetes unravels the complexity around pricing and reimbursement in this market and delivers actionable strategic insights to apply to your global product development program, in order to ensure that you develop a robust evidence-based payor value proposition and achieve commercial success.

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