Insulin shock: Eli Lilly loses the loyalty of one-time faithful customers

Insulin is the most intimate of medications. Each day, you inject it or pump it into your body, on blind faith that it will keep you alive to do the same tomorrow. If any drug would have powerful brand loyalty, surely it is insulin.

      Yet Eli Lilly’s announcement on January 11 that it would cancel construction of its $425 million insulin factory – after installing the foundation and steel beams – is the latest reminder of how the company has lost its dominant position in insulin. Eli Lilly was once the most hallowed name in diabetes, responsible, literally, for saving the lives of countless diabetics. But even revered companies can squander good will – and in my case, break ties with the most loyal of customers.

      Five years ago, Eli Lilly controlled 82 percent of the U.S. insulin market; last year, its market share had fallen to 43 percent, according to IMS Health, a drug-sales tracking firm (which was cited by the Indianapolis Star.) Those numbers won’t turn around anytime soon: longer-lasting “basal insulins” – Lantus (from sanofi-aventis) and more recently Levemir (from Novo Nordisk) – have given many patients a superior therapeutic option because they are more stable and longer lasting. Eli Lilly has no product in that category. Eli Lilly was also beaten to market on inhaled insulin, which Pfizer introduced last year. (Eli Lilly’s version is still in clinical trials.)

      The fortunes of companies rise and fall all the time, but few companies ever had more devoted customers than Eli Lilly’s diabetic consumers. And for good reason. While insulin was discovered by Toronto researchers in 1922, they could not mass produce the drug. But Eli Lilly, through vision, brilliance, and relentless work – the company tested its new product on more than 100,000 rabbits the last six months of 1922 – manufactured the drug that transformed a fatal disease into a chronic illness. Insulin raised the living from “the erstwhile dead,” as Elliott Joslin put it, and Eli Lilly was rightfully crowned a savior.

      The company basked in its own glory. “Insulin: An Epoch in the History of Medicine. A Boon to the Human Race,” ran one of its first ads for the product, which improved over the years – from animal-based insulin, to genetically engineered, biosynthetic human insulin, to insulin analogs. These drugs earned the gratitude of millions of patients, including me.

      I took my first insulin shot in 1977, so I’m not indifferent to a company that’s kept me alive for three decades. I’ve also been fortunate enough to page through the company’s voluminous insulin archives at its headquarters in Indianapolis, and several top executives helped me in my research for my book about diabetes.

      But my research also taught me something else. At some point, Eli Lilly’s commitment to diabetes was eclipsed by that of other companies, particularly Denmark-based Novo Nordisk. Selling insulin is not only about how many sales reps are in the field or how large the advertising budget is (though those are both important). It’s also about making connections to families. For example, I interviewed Carol Lurie, one of the founders of the JDRF. She hailed Novo’s generous support, financial and moral, sustained since the organization’s early days in the 1970s. Novo’s top executive cared about us, she said. When I asked about the JDRF’s support from Eli Lilly, she looked at me sternly and said, “Eli Lilly doesn’t care about children with diabetes.”

      When my family and I went to the Children with Diabetes Conference in Orlando in 2005, virtually all of the major diabetes vendors had large exhibits – and why not? The conference drew 2,200 people, with every parent eager to learn what products could help their children. But Eli Lilly was absent. When I asked CWD founder Jeff Hitchcock about the company, he said, “I don’t mind that they aren’t here, but I just wish they would return my phone calls.” (Eli Lilly did show up last year, seven years after the first CWD conference and long after Novo ranked first in the CWD online poll for favorite insulin companies.)

      Eli Lilly, to be sure, remains in the insulin business. Among other things, it’s introducing three new insulin pens this year, including one with a memory chip. But in our own family, the company’s recent efforts to improve the bottom line had unfortunate consequences.

      When my son was diagnosed in 2004, he began on Eli Lilly’s Humulin NPH, but its sharp “peak” caused him to plunge too low before lunch; so he switched to Humulin Lente, which has a “softer peak.” It worked beautifully, and I was grateful – again – to Eli Lilly. But the following year, the company announced that it was discontinuing its Humulin Lente and Humulin UltraLente insulins, which combined were used by about 66,000 patients. Garrett’s nurse told us that most of these patients were children.

      I’m not naïve. I know that Eli Lilly’s top priority is to its shareholders, not to my son, so if it can make more money by eliminating these insulins, it will do so. We were able to extend Garrett’s use of Lente by scrounging for some remaining bottles, but we just emptied our last vial. In seeking a new insulin regimen, we moved Garrett to Novo Nordisk products. It wasn’t personal. We were just doing what’s best for Garrett’s health. But because it makes sense for Garrett and me to use the same insulins, I’m switching as well – a change that will mean far more to me, I suspect, than to Eli Lilly.

                                                      James S. Hirsch

Comments

[GOPAL]

I like this article.

[GOPAL]

I like this article.

[Scott]

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?

[paul_1149]

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.

[Scott]

Prozac Palace ... LOL!

[Bernard Farrell]

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?

[Scott]

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.