June 1, 2007 (Vol. 27, No. 11)
Steven Heffner
Monitoring, Control, and Treatment of Diabetes Is a Significant Unmet Need in Medicine
Diabetes is now one of the most common noncommunicable diseases globally. It is the fourth or fifth leading cause of death in most developed countries. There also is substantial evidence that it is epidemic in many developing and newly industrialized nations.
Diabetes is certain to be one of the most challenging health problems in the 21st century. Complications from diabetes such as coronary artery and peripheral vascular disease, stroke, diabetic neuropathy, amputations, renal failure, and blindness are resulting in increasing disability, reduced life expectancy, and enormous health cost for virtually every society.
It is no surprise then that the monitoring, control, and treatment of diabetes mellitus and its downstream complications has been and will continue to be a major focus of biomedical research and development efforts. The industry is focused on metabolic disease for good reason—it represents one of the greatest areas of unmet need in medicine, and the market opportunity is open and increasing.
In the top-seven markets, the potential for monitoring and treating the disease as well as treating the direct complications of the disease will exceed $70 billion in 10 years. This is a significant incentive to development.
Epidemiology Drives Opportunity
Trends in the epidemiology of both type 1 and type 2 diabetes are significant. While the markets associated with type 1 diabetes will grow with population rate, type 2 diabetes markets will expand much more rapidly due to the aging of the general population, increased incidence of the disease in younger people, and the enhanced diagnosis rates due to more effective screening. Current estimates of the number of diabetics in G7 countries can be seen in the Figure.
Eating and exercise habits in the industrialized world and particularly in the U.S., are likely to make the markets for type 2 diabetes products among younger individuals more robust than even population demographic figures suggest. Not only are these younger groups more likely to be well insured but they also represent a longer per-patient market opportunity for chronic monitoring and therapeutic regimens.
Demographics, however, don’t tell the whole story either. With the current public health spotlight on diabetes and the emergence of newer screening methods and criteria, it is likely that the percentage of diagnosed type 2 diabetes cases will increase, making the diagnosed population rise even faster. The undiagnosed type 2 diabetes population is the hidden population of diabetics that can represent up to 50% of the total—that is, approximately the same number of diabetics are diagnosed as are undiagnosed.
It is not guaranteed, though, that this large undiagnosed population will be accessible in the near future. Without significant reinforcement of the type 2 diabetes message by industry and the public health community, it is unlikely that the diagnosis rate will climb higher than the 60–65% level that it now holds (although the increase bringing it to that level was a outstanding achievement).
The number of participants in the diabetes markets has increased significantly in the last five years. The number can be expected to expand some more, particularly among biotechnology and biopharmaceutical firms.
Competition Intensifies
The increase in competition is already being experienced. For example, GlaxoSmithKline(www.gsk.com), a company with virtually no participant in this market less than 10 years ago, now has a full-blown development program for type 2 diabetes. It markets two products and has at least eight in development.
Moreover, the presence of small companies has increased greatly over the past five years. These development-stage operations are addressing such approaches as oral insulin and biological approaches to type 2 diabetes drug development. Small firms also abound in the area of oral hypoglycemics. Each is working on a new class of drugs. Each has a dedicated focus on diabetes.
Generic drug companies have jumped into the fray with off-patent oral hypoglycemic drugs. They also are hoping to be allowed to market generic insulin.
This is good for the market in that it will provide many more therapeutic options and, in a market that encourages combination therapy, the potential for significant expansion. It also means that it will be harder for new drugs to fight for attention. Thus, small companies not aligned with a major pharmaceutical company in this market will have a hard time being recognized. Only breakthrough products will get a share of the spotlight otherwise.
With so many competitors and so many options, there will be significant pressure on prices where the product is not highly differentiated. Certain companies that have been in the market for a long time and have recouped their investment can spend time playing with price to gain market share—although the concept of market share is meaningless in a rapidly changing technical environment.
They can also deal with insurers to be given higher priorities within the insurers’ formularies. The younger entrants and the newer products will not have the leverage and bargaining room. Competition will become very stiff despite the need for new products.
New Horizons Are Still a Way Off
Advanced technological approaches to the treatment of diabetes will not significantly impact the market until at least 2013. Concepts such as pancreatic b-cell implantation and stem cell implantation as well as gene therapy, immunotherapy, and several other advanced approaches to diabetes therapeutics are all very exciting. They are generally a long way off also. Most are not even in the clinic.
Perhaps the most promising approach in the short term is the Edmonton Protocol for pancreatic b-cell implantation. This, however, is not a commercial prospect nor is it one that is likely to be used broadly early on. It will probably be reserved for type 1 and type 2 diabetes patients who are refractory to other therapies and/or have major difficulties with insulin administration. If the need for lifelong immunosuppression can be avoided, it might also be used with very young type 1 diabetes patients so that they do not have to spend their lives administering exogenous insulin to themselves.
Whatever the technology, it is at least five to 10 years away from seeing general use. Therefore, competitors in the field should be concerning themselves with the competitive potential of new hypoglycemic drugs and alternative insulin delivery before they look to more advanced technologies as impacting their business.
That said, the market is hungry for new products, and the pharmaceutical industry has been ready and willing to respond to that hunger. It can be expected that there will be a ready acceptance of new oral hypoglycemic drugs and rapid market penetration because replacement will be minimized and polytherapy will provide significant opportunity for the emerging therapeutics.
Steven Heffner is the publisher of Kalorama Information, a publisher of market research in the life sciences. Kalorama’s Diabetes and Diabetic Complications: Major World Markets, 3rd Edition, was published in March 2007. For more information, visit www.kaloramainformation.com.
