Investigation into Novo Nordisk and Sanofi amid Insulin Market Pressures

The South African government is investigating Novo Nordisk and Sanofi for alleged anti-competitive practices regarding human insulin pens. This follows recent pricing pressures due to major legislative changes aimed at reducing insulin costs. The inquiry also comes in the wake of similar actions against other tech giants by the Competition Commission, as drug makers navigate significant shifts in the insulin marketplace.

In recent years, the insulin market has faced considerable challenges, prompting companies under scrutiny to adjust their pricing strategies. The South African government is currently investigating allegations of anti-competitive conduct by Novo Nordisk and Sanofi concerning human insulin pens. This inquiry, reported by Bloomberg, involves an examination of the companies’ device patents and designs to assess potential limits on competition and market entry for new developers.

The Competition Commission of South Africa is actively coordinating with the local subsidiaries of Novo Nordisk and Sanofi during this investigation. Additionally, there have been significant price reductions in the insulin market, largely initiated by the implementation of key legislation like the Inflation Reduction Act and the Affordable Insulin Now Act, both aiming to alleviate patients’ financial burdens associated with insulin costs.

The recent inquiry into these pharmaceutical companies follows the Commission’s prior actions, including a $30 million fine imposed on Google for anti-competitive practices, as well as ongoing investigations into Meta and X (formerly Twitter) regarding their impact on South African media. Subsequently, prominent insulin manufacturer Eli Lilly announced a 70% price cut along with a cap on monthly costs at $35, pressuring both Novo and Sanofi to implement similar reductions shortly thereafter.

Despite these price cuts, Novo Nordisk has made the decision to withdraw its long-acting insulin product, Levemir, from the market by the end of 2024. Additionally, Eli Lilly has restricted the availability of its Humalog and Lispro products due to marketing constraints. Sanofi also ceased production of its pre-mixed insulin product, Insuman, with implications mostly in the U.K., following its earlier price cuts.

Market experts continue to observe these developments. BMO Capital Markets analyst Evan Seigerman indicated that Novo may be compelled to reevaluate their production choices if they cannot maintain profitability on certain insulin products. Notwithstanding the pricing pressures, both companies are pursuing innovation; for instance, Lilly is developing a once-weekly insulin injection, while Novo is advancing its own version, insulin icodec, though it recently faced regulatory hurdles with the FDA in July 2024.

The investigation into Novo Nordisk and Sanofi by the South African government highlights the increasing scrutiny on pharmaceutical companies regarding pricing and competition in the insulin market. Amid significant market pressures and regulatory changes, both companies have made strategic pricing adjustments while attempting to innovate. The ongoing developments in this sector will be pivotal in shaping the future accessibility and affordability of insulin products for patients.

Original Source: www.biospace.com