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I like this article.

I like this article.

As a P.S. to my original response to this eloquent post, I'm not sure whether you all caught my recent post on this topic, I now have an answer to one of the great mysteries surrounding Lilly's January 11, 2007 announcement that the company would cancel construction of its $425 million insulin factory in Virginia – after installing the foundation and steel beams and everything.

The short answer is that Lilly has decided to outsource the manufacture of its treasured brands to a third-party manufacturer. One day, while browsing through the FDA's website, I discovered that in 2003, Lilly had obtained approval to have Abbott Laboratories' One2One Global Pharmaceutical Services (which was spun-off as an independent company in 2004, and is now known as Hospira, Inc. One 2 One Contract Manufacturing Services) which is physically located in McPherson, Kansas. The reasons for deciding upon this company are multifaceted, but if it was this easy to do, there is no reason on earth why it couldn't be outsourced to a company such as India's Biocon, Ltd. in the not-too-distant future to beef up the margins on this product.

I'll spare you a diatribe about the ethics of such a decision or the quality-control that the company is ceding by such a decision, but considering this move, it seems to me that protecting the integrity of the Humulin and Humalog brands rates relatively low with company management.

Therefore, patients should certainly consider whether changes in their healthcare provider's (and the pharmacy benefits managers who run them) formularies in an effort to encourage patient switching to "preferred" drug brands is worth fighting for?

Kelly, a Lilly exec just came out with a statement on their intentions in the diabetes space. They are feeling the heat. Byetta and the Humalog pen are front and center:

http://www.indystar.com/apps/pbcs.dll/article?AID=/20070121/OPINION01/701210373/-1/ZONES04

Over at the InvestorVillage.com AMLN board we all really appreciate your work.

Be well,
p.

Prozac Palace ... LOL!

James

I agree with the assessment that Lilly is no longer committed to diabetes. And I've also been to the Lilly facility for a diabetes advocacy training session about 5 years ago. It's a shame to see them no longer committed to what will continue to be a big market for years to come.

This is also true for Glucagon. Have you looked at Glucagon kit recently?

It's still being made by Lilly, and it looks like the packaging hasn't changed since the 1950s. I think Lilly owns this market, couldn't they make these kits a little more useable and easier to carry around? This reminds me of Kathy Sierra's post on Usability (http://headrush.typepad.com/creating_passionate_users/2007/01/what_comes_afte.html). Lilly has Functionality and Correctness down pat for Glucagon. They barely have Learnability. And the other qualities aren't even under consideration.

I agree with the previous poster about Lilly abandoning their cash cow. Is it any wonder their HQ is referred to as the Prozac Palace?

I read that news that the Virginia-based insulin factory for Lilly and saw it perhaps a but differently. My take on it was that Lilly's focus has been on conditions unrelated to diabetes, and as a result, the left themselves open to competition to come it and eat their cash cow.

The fact that Lilly does not have a long-acting analog in development to compete (at least based on what the company has released to investors) with Novo Nordisk and Sanofi-Aventis suggests that the Humalog one-trick pony of only a rapid-acting analog may not be enough to sustain this business over the long-haul, although management recently reiterated its "committment" to the insulin business. I'm not sure we should believe them.

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