The South African Competition Commission is investigating Novo Nordisk and Sanofi for possible anti-competitive practices related to insulin pens. This follows significant price reductions in the U.S. prompted by legal pressures. The companies face challenges such as product discontinuations and regulatory hurdles, even as they pursue innovative insulin solutions.
The insulin market has encountered significant challenges in recent years, prompting companies to reduce drug prices due to government policies and mounting pressure. Currently, the South African government is conducting an investigation into Novo Nordisk and Sanofi regarding alleged anti-competitive practices related to human insulin pens. The Competition Commission of South Africa is reviewing the companies’ patents and proprietary designs to assess potential restrictions on competition and market entry for other suppliers.
This investigation follows notable policy shifts affecting the insulin sector globally, such as the Inflation Reduction Act and the Affordable Insulin Now Act, both aimed at reducing out-of-pocket expenses for insulin users in the United States. Additionally, the Competition Commission recently imposed a fine on Google and is investigating Meta and the social media platform X for anti-competitive actions that impact South African media.
In a notable move earlier this year, Eli Lilly decided to reduce its insulin prices by 70% and set a cap on out-of-pocket costs at $35 per month, a decision that prompted similar price reductions from Novo and Sanofi. However, following these adjustments, Novo announced the discontinuation of its long-acting insulin product, Levemir, by the end of 2024. Likewise, Eli Lilly revealed it would limit the supply of its insulins, Humalog and Lispro, due to marketing restrictions.
Furthermore, Sanofi discontinued its pre-mixed insulin product, Insuman, affecting mostly the U.K. market, prior to their price cuts in early 2023. BMO Capital Markets analyst Evan Seigerman remarked in May 2024 that Novo cannot sustain production of unprofitable products, emphasizing the need for financial prudence in their operations.
Despite the pricing pressures, innovation in insulin development continues, with Lilly progressing on a once-weekly insulin injection that demonstrates substantial effectiveness compared to traditional daily doses. Novo is also pursuing a similar product called insulin icodec, although its development faced challenges when the FDA rejected its drug application due to concerns regarding its use in type 1 diabetes.
The investigation of Novo Nordisk and Sanofi by the South African government underscores ongoing challenges in the insulin market, influenced by price reductions and competitive practices. While both companies initially responded to pricing pressures with reductions, they also face obstacles from regulatory bodies and product discontinuations. Continued innovation in insulin formulations remains essential as the market navigates these complex dynamics.
Original Source: www.biospace.com
