April 2010

By Drew Armstrong April 30 (Bloomberg) — More than 70,000 Americans a year die from complications of diabetes, making it the country’s fifth-largest medical killer. While that sounds dire, Novo Nordisk A/S says the real picture may be worse. That’s why the Bagsvaerd, Denmark-based drugmaker, the world’s top supplier of insulin, lobbied to get a provision in the U.S. health law that will push doctors to list diabetes more often as a cause of death, Bloomberg Businessweek reported in its May 3 edition. A higher toll means more public and private funding for treatment, detection and prevention, said Michael Mawby , Novo’s Washington lobbyist, in an interview. “For drug companies, it is often as important to ‘sell’ the disease as it is to sell the cure,” said Jack Scannell , a Sanford C. Bernstein & Co. analyst, in an e-mail. “Much of the growth in the diabetes drug sales has come from earlier diagnosis, more aggressive treatment, and higher prices.” Improvement in reporting may lead to more revenue for Novo Nordisk, said Donny Wong , a London-based physician and analyst with Decision Resources Inc. Because of the new provisions, along with the growing prevalence of diabetes, the company’s insulin sales in the U.S. could double to $4 billion in 2018, from almost $2 billion in 2008, Wong said. Doctors and coroners underreport the death tally from diabetes, Novo Nordisk says. Some 72,499 Americans were listed as dying from diabetes in 2006, the latest figures available from the Centers for Disease Control and Prevention . Lobby Targets To get the death rate addressed in the new health law, Novo lobbied Senator Kay Hagan , a North Carolina Democrat with a Novo Nordisk plant in her state, and Representative Zach Space , an Ohio Democrat whose son has diabetes. In coming months, regulations will spell out precisely how the new law will be applied. After that, when a patient dies from diabetes complications, such as a heart attack or a stroke, coroners and physicians will be encouraged to list diabetes on the death certificate. Public health officials will consider the rising mortality data when they allocate research funds. States may also be required to publish reports on how they are improving diabetes care, and medical schools could be asked to improve training in this area, according to the law. The new mandate may result in health systems paying more for diabetes treatment, compared with other health priorities, according to Bernstein’s Scannell, who is based in London. “The provisions increase the chance that any given diabetic patient is diagnosed, increase the chance the patient is treated with drugs, increase the intensity of treatment,” Scannell wrote. ‘Underestimating Impact’ By not listing diabetes as a cause of death, physicians “certainly underestimate the impact,” said Robert Anderson, chief of the CDC’s mortality statistics branch, in a telephone interview. According to the agency’s data, diabetes is the fifth biggest killer in the U.S. after heart disease, cancer, stroke, and respiratory illnesses. Only 68 percent of U.S. diabetics are diagnosed, according to the American Diabetes Association , an advocacy group based in Alexandria, Virginia. Some 5.7 million Americans don’t know they have the disease, the association said. As a result of the provisions, the diagnosis rate may climb to 80 percent by 2018, said Decision Resources’ Wong. That, plus the increase in the total population of diabetics, may raise total U.S. sales of insulin and oral type 2 diabetes therapies to $24.4 billion, from $10.3 billion in 2008, the consultant estimated. Disease Complications “Nobody dies from diabetes itself, but the complications are responsible for huge rates of morbidity and mortality,” Decision Resources’ Wong said. Diabetics who don’t manage their disease can suffer from blindness, heart disease and conditions requiring amputation, he said. It was that human toll that drew Hagan to the cause. “I was interested in this because in North Carolina over 600,000 adults have diabetes,” she said in a phone interview. Novo Nordisk says it first came to Hagan with data showing that almost 10 percent of people in the state have diabetes. That’s roughly double the number one decade ago, according to the North Carolina Division of Public Health in Raleigh. “She got religion on this,” Mawby said. “She started looking at the numbers, and she was just great.” Hagan’s home state has a 400-employee Novo Nordisk factory, in Clayton, N.C., that makes and distributes insulin products, according to Novo Nordisk’s Web site. With the company’s help, Hagan signed up cosponsors for a stand-alone diabetes bill she introduced in July. It contained the provisions eventually included in the health-care overhaul. ‘A Superstar’ “Kay Hagan was a superstar,” Mawby said. Eli Lilly & Co. , the largest U.S. maker of insulin, also said it worked with lawmakers to focus on diabetes. In 2006, Lilly Chief Executive Officer John Lechleiter met twice with Senator Edward Kennedy , the Massachusetts Democrat, to discuss diabetes policy, among other matters. Lobbyists for Indianapolis-based Lilly and Kennedy’s staff remained in touch after Kennedy was diagnosed with brain cancer, the disease that killed him last August. “We did play a role to get it in there in the initial stages,” Sean Donohue, Lilly’s senior adviser for federal government affairs, said in a telephone interview. On the House side, Novo Nordisk says it relied on Space, the Ohio politician, to help push for the diabetes provision. Partly because his son is afflicted with the disease, Space has made diabetes treatment and prevention a signature issue, speaking about it and pressing for more funding and treatment options. Bill Introduction Space introduced the bill that Hagan’s was based on in March 2009, and its provisions were included in the legislation passed by the House. His office didn’t return several messages seeking comment. While the diabetes language didn’t make it into the original Senate bills, on Dec. 22, 2009, it was written into the legislation that was crafted by Kennedy’s deputy, Senator Chris Dodd , the Connecticut Democrat; Finance Committee Chairman Max Baucus , the Montana Democrat; and Senate Democratic Leader Harry Reid of Nevada. The bill was signed into law on March 23. In 2009, Novo Nordisk gave $2,820 to Space’s campaign and $2,000 to Hagan’s through the company’s political action committee , according to data from the Center for Responsive Politics, a non-profit research group based in Washington. The company gave two of its donations to Space and its only gift to Hagan in the two weeks following Space’s introduction of his diabetes bill. Campaign Donations Lilly has given Hagan’s campaign $1,000 , and nothing to Space. Neither company’s gifts crack either lawmaker’s list of top 100 givers, according to the center. Novo Nordisk’s gift to Space was tied for the largest gift by the company to any House member’s campaign. “One of our big concerns for all of our product lines is making sure patients have access,” said Jay Bonitt, Lilly’s vice president of federal government affairs. Globally, Novo Nordisk’s diabetes products made up 73 percent of revenue in 2009, said Sean Clements , a company spokesman.. Lilly had $2.98 billion in sales in 2009 from its diabetes drugs Humalog and Humulin, or 14 percent of the company’s total revenue from pharmaceuticals. “Obviously,” expanded use of these products “is going to benefit companies across the board,” Donahue said. ‘Raising the Profile’ Analysts say the legislative efforts were a good move by the companies. “If I was Novo, I’d do exactly the same,” said Bernstein’s Scannell . “It doesn’t do them any harm.” “It’s certainly a positive for raising the profile and need for diabetes therapy,” said Ramsey Baghdadi , a researcher with Prevision Policy LLC, health care policy analysts in Washington, D.C., in a phone interview. Now that the health overhaul is law, Novo Nordisk is pushing for diabetes care to get a slice of the $15 billion the health law allocates for “prevention and public health.” The company, along with the American Diabetes Association and a coalition of other diabetes and health advocacy groups is pushing for at least $5 billion of the prevention and wellness money to be spent on diabetes prevention and management. In a March 23 letter sent to Health and Human Services Secretary Kathleen Sebelius , the coalition suggested that the money go toward finding and treating more people with diabetes, as well as getting diabetics on therapies, such as insulin, to control their blood sugar levels. Righting a Wrong “The means to address this crisis are simply not in evidence,” Novo Nordisk and its allies wrote. “The prevention and wellness funds offer a significant opportunity to right this wrong.” Hagan is supporting that effort. How the prevention money gets doled out will be decided at least in part by the Senate Appropriations Committee, the Senate body that sets discretionary spending each year. “We’re working on that and I hope we’ll be successful,” Hagan said in a phone interview. To contact the reporter on this story: Drew Armstrong in Washington at darmstrong17@bloomberg.net .