Pharma Companies Treating Diabetes are Under Strong Pressure.

Pharma Companies Treating Diabetes are Under Strong Pressure.
January 26 18:46 2019

Novo Nordisk challenge accelerates diabetes technology advancement (Healio)

  • Last year, Novo Nordisk and MATTER held a challenge that tasked developers with creating platforms that could be combined with Novo’s pen injectors to improve diabetes care.
  • The winners – Adelie Health, HumanCapitalWorks, Medopad, Simple C, and Xbird – received USD25k each and a proposal to take part in an accelerated development plan.
  • The winning proposals include digital/ smart devices, remote monitoring and behavioural applications, and other machine learning/ IoT-powered solutions.

Comments

  • The number of diabetics has risen by 3x over the last 15 years and healthcare expenditures on them has been growing at a 13% 10 year CAGR
  • While I continue to expect continued growth in the number of diabetes patients, analysts think that costs associated with treating a diabetic (current 2-3x versus an average patient) can be brought down substantially by using new technologies which slows down disease progression and reduce the cost of care delivery.
  • Patient data platforms (along with continuous glucose monitoring, home haemodialysis, telemedicine etc) which help in increasing drug adherence should contribute towards achieving these goals.
  • I think that the traditional pharmaceutical companies will remain structurally challenged due to downward pricing pressure especially in old classes of diabetes drugs. Regulatory pressures especially in the US – which has the most glaring health care cost inflation – seem to be rising.    

Conclusion

  • Legacy Pharma companies are challenged by new entrants (mainly Apple and Google) as Data becomes the way to tailor treatments.
  • As new entrants emerge and Diabetes prevalence increase in every country, Countryies’ Healthcare models are under significant pressure to treat more people with the same amount of money. Therefore they will HAVE TO lower the price of these drugs and treatments in the future.
  • Therefore, I would not invest in companies exposed to Diabetes such as Novo Nordisk, Eli Lilly or Sanofi
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Mr. Crypto Lemon
Mr. Crypto Lemon

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