Novo Nordisk Launches Diabetes Drug in Germany After Rethink

Danish drugmaker Novo Nordisk, the world's biggest insulin producer, has decided to launch its diabetes drug Tresiba in Germany after seeing signs of a more favorable pricing situation there.

Tresiba was approved in the European Union last year, but despite Germany being Europe's biggest market Novo hesitated to market the drug there because German authorities have been reluctant to support new and more expensive treatments.

"We've recently observed that Germany has started to reward new innovative drugs," Jakob Riis, executive vice president of Marketing & Medical Affairs in Novo Nordisk, told the news agency Reuters.

In 2011 Germany started comparing the benefits of newly approved drugs with those of existing treatments and gave medical insurers more bargaining power in price talks with drug makers.

That prompted a number of companies to refrain from launching products in Germany, including Boehringer Ingelheim and partner Eli Lilly, who chose not to sell diabetes drug Trajenta there.

"The bar may have been moved slightly down in Germany," Riis said.

In Germany, he said, drugmakers can initially set the price they want for new products and get a subsidy at the same time. Then, within a year, German authorities initiate an assessment process to find out if the price or subsidy should change.

"Within 12 months, we must agree on a price otherwise we will leave the market," Riis said.

In December 2013 Bristol-Myers Squibb and AstraZeneca said they would pull a new diabetes drug from the German market because they had failed to agree on a price with a body of medical insurers.

While the EU approved Tresiba, US regulators unexpectedly refused to approve it in February 2013 until Novo Nordisk conducted extra tests over potential heart risks, dealing a major blow to one of the company's main products as well as to its share price.