In a market under strong pressures to contain costs, launching innovative products in a crowded market can be a challenge. Novo Nordisk GM Sanne Groenemeijer believes his organization's willingness to try various solutions has helped them to maintain their dominant position as the market leader in diabetes.
Since you took the reigns in 2012, what were the market dynamics then, and how have they changed since?
Starting in 2008 and 2009, it was clear that there would be significant changes in the marketplace and that some challenging years would lie ahead. The financial structure of our healthcare system was simply no longer sustainable. There were many different ideas and plans at the government and payer level regarding how things should be reformed; from our perspective, we were unsure what to expect. We did our best to prepare for anything and everything. As Novo Nordisk Netherlands, we were very much aware of our responsibility to contribute and support the necessary changes.
Starting in 2012 some significant structural changes were indeed introduced in the Dutch healthcare space, which had become effective by the beginning of 2013. Perhaps the most significant change was the transfer of the budget for in-patient medicines to the hospital budget. Individual hospitals were now responsible for high-cost, in-patient treatments. Novo Nordisk has portfolios of products in hemophilia and human growth hormone, so these budgetary changes impacted our business too. Sales of our hemophilia medicines fell by around 50 percent in two years, which was mainly driven by price cuts arising from this transfer of in-patient medicine budget to the hospitals.
We knew maintaining previous sales levels would be difficult, but were confident that we would be able to defend our position with our innovations such as new injection pen systems for patients. Unfortunately, given the environment, these ‘value-added’ treatment options had zero impact on payers and doctors alike, the latter being a surprise. However, with reimbursement for these innovative in-patient medicines now coming out of hospital budgets, prescribers were suddenly faced with impossible decisions such as having to choose between either retaining a nurse, purchasing new equipment, or prescribing an innovative therapy. Unless the clinical added value of the more innovative therapy is very substantial, very few doctors would choose it.
At the same time, dynamics in the diabetes market completely changed in 2012, when some of our competitors launched their DPP-IV inhibitors. Novo Nordisk operates differently than most pharmaceutical companies. We have had good working relationships with stakeholders in the diabetes community - even at the GP level - for more than 30 years. We recognized that, given the recently introduced cost containment measures, the diabetes market was not prepared for a strong product launch, with a more typical approach in which products are pushed at full force. The Netherlands has highly effective treatment regimens based on the Dutch diabetes treatment guidelines. Because of this, most patients can be effectively treated with generic versions of metformin and sulphonylureas at a cost of about two euros per month. When other players started pushing products in the same class at 40 times the price for a patient group of approximately 800 000 patients, this caused a tremendous pushback against innovation in diabetes.
I understand and even agree with these priorities. But we must always consider the patient, and that’s where we have some concerns regarding the way innovations are currently weighed in the Dutch healthcare system. If the decision to use an innovative therapy is purely based on budgetary considerations, I vehemently argue that we would be heading in the wrong direction.
“I truly believe that if you want to move forward, you must move forward together.”
