Health-care payers already spend more per member on diabetes medicine than for any other disease, and that spending is likely to grow substantially as the number of people diagnosed with the disease climbs from 366 million to 552 million by 2030.
If health-care payers hope to keep those costs in check, they'll need device and drug makers to come through with solutions that allow patients to better manage their diabetes and help prevent debilitating nerve damage and life-threatening cardiovascular disease.
Changing how diabetics take their insulin
MannKind has twice failed to move its inhalable insulin Afrezza past regulators, but the company hopes the FDA's third review of the drug in July will have a better outcome.
An OK for Afrezza to go to market would give diabetics more options for mealtime insulin, potentially improving glycemic control. In studies, Afrezza demonstrated that it was as effective an insulin source as Novo Nordisk's top-selling NovoLog. However, that assessment comes with a caveat: As the FDA advisory panel pointed out when it gave Afrezza a thumbs up in April, dosing in important phase 3 trials climbed for type 1 diabetes patients receiving Afrezza while remaining the same for patients receiving NovoLog. That raises questions over whether the study's findings were clouded by Afrezza's variable dosing.
If approved, Afrezza could provide a valuable additional tool for diabetics that may bolster adherence, but it will only become a commercial success for MannKind if embraced by patients. Pfizer previously pulled its own inhaled insulin, Exubera, when sales proved lackluster.
Personalized medicine at your fingertips
Apple executives sat down with the FDA last December to discuss how the regulator would handle devices from the tech giant that include sensors and a glucometer.
That kicked off a frenzy of excitement among diabetics and Apple fans speculating that such features could be incorporated into a long-rumored iWatch
According to an FDA response to a Freedom of Information Act request from Apple Toolbox, the agency would regulate software used to collect and provide a readout of blood sugar levels for diabetics, but not the device used to display that information. Additionally, the FDA seemed to suggest it wouldn't regulate Apple's glucometer if its intention was for a general user interested in improving their nutrition, but would regulate it if it was marketed specifically to diabetics.
The fact that Apple is asking the question supports the notion that personal mobile devices will increasingly include features designed to provide users with a running snapshot of their overall health. That type of information could go a long way toward helping patients better control their disease. However, Apple hasn't yet announced (much less launched) such a product, so it's only a guess as to what might happen here.
Tossing aside needles for good
While MannKind's focus is on launching inhalable insulin, Novo Nordisk believes a much bigger opportunity exists for insulin in tablet form.
The appeal of replacing insulin shots with a pill that can be taken like aspirin is significant. People are notoriously gun-shy when it comes to self-injection, and studies have shown that insulin injection is one reason that up to a third of diabetics fail to take their medicine as prescribed. That concerning adherence rate is particularly skewed toward younger, type 2 patients.
As a result, eliminating the use of insulin injections is becoming an important focus for drugmakers. Novo plans to invest $3.7 billion in programs to develop tablet alternatives to current injectable diabetes drugs, including both insulin and and GLP-1 agonists like Novo's blockbuster drug Victoza, which stimulates natural insulin production. If successful, Novo believes the market for tablet alternatives to injections could be worth $18 billion in the next decade.
Fool-worthy final thoughts
MannKind hopes to secure FDA approval in July, but even then it would face the major problem of paying for the launch of Afrezza. Marketing diabetes drugs is terribly expensive and MannKind's coffers aren't as full as they once were. As of the most recent quarter, the company had just $36 million in cash and $174 million in debt. That suggests MannKind may need a partner (or dilution).
That's a challenge Apple doesn't have to worry about. There's no question the company has the financial firepower to advance any number of innovative software and hardware products oriented toward health care. At Apple's Worldwide Developers Conference last week, the company revealed HealthKit, a tool that will connect developers of health-care apps to each other and to devices, so Cupertino is already moving in that direction. A bigger challenge may be developing a product that is awe-inspiring enough to become mainstream.
Of the three, Novo Nordisk is furthest away from potentially delivering on its diabetes game changer. Creating a pill form of insulin won't be easy given that the stomach is designed to break down proteins like insulin, not protect them. Even if Novo can overcome that hurdle, it will still need to figure out how to deliver enough insulin to the body (and have it last long enough) to match up or outperform current insulin injectables. Regardless, these three efforts suggest companies are focused on creating new solutions that could have an important impact on patients, so stay tuned.
Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may or may not have positions in the companies mentioned. Todd owns Gundalow Advisors, LLC. Gundalow's clients do not have positions in the companies mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.