Walmart announced launching and commercialization of private brand analog insulin, ReliOn NovoLog, a rapid acting analog insulin (insulin aspart). The product is used to control high blood sugar concentration in adults and children with type 1 and type 2 diabetes. Walmart will be pricing the product at much lower price as compared to other branded products, aiming to bridge the widening pricing gap among the insulin products.
ReliOn NovoLog insulin will be manufactured by Novo Nordisk and posy July will be commercialised at pan US Walmart Pharmacies and Sam’s Club pharmacies. A prescription would be needed in order to purchase the product, which is being priced at much lower price as compared to other branded products in the market which is USD 72.88 for Insulin vials and USD 85.88 for injectable pen, FlexPen. The company claims the slashed prices as compared to other brands will engender 58% to 75% cost savings for the customers, converting to USD 101 per branded vial and USD 251 per package of branded insulin pen. Walmart’s diabetes portfolio includes blood glucose monitors, lancets and other products falling under ReliOn portfolio.
Offering insulin products at much cheaper price, Walmart aims to cut down the economic burden for most diabetic patients in US. Pricing of this product has been contentious with the pricing strategy being scrutinised widely by various stakeholders. Insulin market in the US and globally is an oligopolistic industry with three dominant players – Novo Nordisk, Sanofi and Eli Lilly. Past few years have seen intense public criticism, pressurizing these pharma giants to reduce the prices of their products. In response to the censure for pricing of insulin products, Sanofi in 2019, initiated Insulin Valyou Savings Program, charging USD 99 for their insulin, for up to 10 packages of pens and/or 10 ml vials per month, especially benefitting uninsured customers or the ones paying in cash. Novo Nordisk hopped on the bandwagon and launched their My$99Insulin program, under which customer receives any combination of their insulin products, with a limit of 3 vials or 2 packs of pen. Eli Lilly has been exposed to heat because of widening of pricing gap, with their insulin product’s rising from USD 21 per vial in 1996 to USD 265 in 2020. In 2019, Eli Lilly announced availability of generic version of Humalog (insulin lispro) in US, offering Lispro at half the branded version price, single vial priced at USD 137.35 and pack of 5 KwikPens at USD 265.20.
Availability, affordability, steep increase in prices of insulin and oligopolistic nature of market, with lesser competition regulating the pricing has been a topic of discussion and has been vilified publically. Regulatory inconsistency had historically been a barrier for entry of insulin, a biologic being approved under small molecule has been transitioned into a new regulatory pathway post March 23, 2020. Under this regulatory transition, a set of products including insulin and hormones, transitioned from being approved as drugs to biological products. Another factor restricting entry of other players in the market is technology and manufacturing processes protected by trade secret laws. Strong foothold of the three players globally and their potential holding over pricing in order to fortify the oligopolistic nature of the market have been key challenges considered a risk for new entrants. Although various policies are being drawn out by public stakeholders, sustainability of most such initiatives haven’t gained confidence. Restiveness and criticism projected by public and other stakeholders have resulted in reduction of costs at certain levels and it will be interesting to observe any shift in market dynamics upon entry of insulin biosimilars in future.