The global type 2 diabetes pharmaceutical market in the 2012 base year was $28.1 billion, including both branded and generic drugs. Branded products alone accounted for $19.2 billion across the 10 markets. 

 

At 58% of the overall type 2 diabetes market, the US is clearly the dominant market, totaling $16.4 billion in branded and generic pharmaceutical sales. This is due to the much higher prices of pharmaceuticals in this country and due to the high diagnosed prevalence. The next-largest individual market is Japan, at 9% of the worldwide type 2 diabetes market, totaling $2.5 billion. The 5EU countries make up 18%, while emerging markets, including India, China and Brazil together, account for 15% of the total market.

 

Over the forecast period, emerging markets will grow in size most rapidly, due to a dramatic increase in the prevalence and diagnosis of type 2 diabetes, which are attributed to increased life expectancy and lifestyle changes that have occurred through rapid economic growth. Uptake of branded drugs will also increase in these markets due to fast growth of the middle class. Sales in the US will grow by about 9% per year over the forecast period. The European and Japanese markets will also increase steadily; however, cost constraints in Europe and the slow regulatory process in Japan will slightly limit growth in these regions.

 

 

Historic leaders in the type 2 diabetes space include Novo Nordisk, Bristol-Myers Squibb, Sanofi, Novartis, GlaxoSmithKline, Merck, Eli Lilly and Takeda; AstraZeneca and Boehringer Ingelheim have recently entered the space through the formation of partnerships. All of these companies have had or will have blockbuster drugs in this space. Takeda and GlaxoSmithKline faced a large patent cliff in 2012 with the loss of market exclusivity for their blockbuster drugs, Actos and Avandia, respectively. Avandia’s patient share dropped sharply even before the patent cliff due to its adverse effects. Takeda is compensating for Actos’ loss of patent protection by strengthening its diabetes portfolio through partnerships, but also by developing some novel, first-in-class molecules. Novo Nordisk, Sanofi and Eli Lilly are all facing patent expiry for their blockbuster insulin analogs (Novolog, Lantus and Humalog, respectively) this and next yearin 2013 and 2014, and will suffer erosion to biosimilars from around 2015, when presumably all the regulations for biosimilar insulin production will be in place. The companies are undertaking different strategies, whereby they either go on the offense or defense, to address this problem. Eli Lilly already has a Lantus biosimilar in late-stage development, which will be a strong competitor to Sanofi’s Lantus, while Sanofi is developing a superior version of its own product Lantus and also a fixed-dose combination of Lantus and Lyxumia in order to protect its own franchise. Sanofi is also stepping up its biosimilar insulin development program and expects to have two projects in clinical development soon, which are likely to be versions of Eli Lilly's Humalog and Novo Nordisk's Novolog. Only Novo Nordisk does not have a biosimilar insulin strategy, which reflects its existing portfolio of novel insulin analogs in development.

 

Future leaders during the forecast period will include Novo Nordisk, AstraZeneca, Merck, Eli Lilly/Boehringer Ingelheim, Takeda, and Johnson & Johnson. All of these companies have late-stage pipeline products or very recently marketed products that have the potential to strengthen significantly the companies’ current portfolios.  Novo Nordisk will remain the market leader in the type 2 diabetes market overall, and particularly in the insulin market, with its several insulin analogs, marketed or in development, and its current blockbuster from the GLP-1 class, Victoza. AstraZeneca will be the fastest growing company in the type 2 diabetes space and may become the second-largest player with its two potential blockbusters: first-to-market (in the EU and China) SGLT-2 inhibitor Forxiga, and first-to-market once-weekly GLP-1 agonist Bydureon. AstraZeneca has the potential to run shoulder to shoulder with Merck, which will continue capitalizing on its blockbuster Januvia throughout the forecast period. 

 

The type 2 diabetes market is very mature, marked by a late-stage pipeline filled with me-too drugs. Some companies, such as Sanofi, have started focusing on price rather than on therapeutic value. Sanofi’s recently marketed drug Lyxumia was launched at a heavy discount to its rival GLP-1 agonists, BMS’ Byetta and Novo Nordisk's Victoza. Lyxumia is the fourth-to-market GLP-1 product with low level of differentiation in the GLP-1 space, and thus Sanofi had to offer a competitive price in order to win market share. With health systems in many markets facing cost pressures today, this is likely a strategy that other companies will adopt with their me-too drugs that are in late-stage development. However, some companies, like Eli Lilly, are embracing a new business model, discarding the traditional blockbuster approach and instead focusing on highly individualized solutions for patients.

 

 

The type 2 diabetes therapeutics market is crowded with many generics and branded generic drug products, comprising several classes of treatment options. Nevertheless, owing to the increasing prevalence and progressive nature of the disease, there are considerably high unmet needs within the indication. Overall, these unmet clinical needs are interrelated and they include improved durability of treatment, a better balance of efficacy of glycemic control with cardiovascular safety, hypoglycemia avoidance, and tolerability and ease of compliance. 

 

 

All currently available treatments for type 2 diabetes are initially effective and reduce complication rates, but they lack the ability to maintain glycemic control in the long term because of the progressive nature of pancreatic β-cell dysfunction; this represents one of the highest unmet needs in the type 2 diabetes space. As the late-stage pipeline is dominated by me-too drugs and by drugs belonging to novel classes that are not very different from the marketed classes, most of the unmet needs will remain unfulfilled in the foreseeable future. Therefore, this market has a significant growth opportunity for new patent-protected products.

 

Molecules in the earlier stages of development, Phase II or earlier, employ various novel mechanisms of action. These early-stage drug classes include 11-beta-hydroxysteroid dehydrogenase (11b-HSD) type 1 inhibitors, G protein-coupled receptor 119 (GPR119) agonists, glucokinase activators, ranolazine, fructose-1,6-bisphosphatase inhibitors, protein tyrosine phosphatase 1B inhibitors, carnitine palmitoyltransferase 1 inhibitors, acetyl CoA carboxylase 1 & 2 inhibitors, salicylate derivatives, and a number of other novel agents that may hold promise for fulfilling some of the unmet needs in type 2 diabetes. In order to address the biggest unmet need in type 2 diabetes, new drugs must address the problem of insulin resistance, as this is the root of the disease, but they must do this while offering a strong cardiovascular safety profile and not causing weight gain, which is currently the biggest problem with insulin sensitizers such as TZDs.

 

 

During the 10-year forecast period, we anticipate that the type 2 diabetes market will not experience a fundamental shift in the classes of drugs that are preferred by physicians. Rapid uptake of drugs from the novel class of SGLT-2 inhibitors will occur; however, DPP-4 inhibitors and GLP-1 receptor agonists will continue dominating the non-insulin type 2 diabetes space because SGLT-2 inhibitors will often be used as a third-line treatment. GLP-1 receptor agonists will experience the fastest growth of all classes (CAGR of 13.4%), due to their weight-loss effects and their novel once-weekly administration, which is preferable to the standard once- or twice-daily therapies. Three me-too drugs from the GLP-1 class will reach the market over the forecast period: GSK’s albiglutide, Eli Lilly’s dulaglutide and Novo Nordisk’s semaglutide. They are all once-weekly therapies like BMS’ currently marketed Bydureon, but they have a somewhat better clinical profile in terms of convenience. As albiglutide will reach the market first among these three upcoming agents, it will gain a significant market share and achieve sales of $1.2 billion by 2022. Upcoming DPP-4 inhibitors, such as Merck’s MK-102 and Takeda’s trelagliptin, will also only offer an advantage in terms of convenience, with once-weekly instead of once-daily administration. This advantage will not give them as much of an edge as it would in the injectable GLP-1 space, as DPP-4 inhibitors are oral drugs. Merck’s MK-3102 will achieve sales of $591m by 2022. One distinguished and quite unique feature of the type 2 diabetes market, illustrative of the rapid growth expected in this disease area, is its ability to support multiple key growth drivers in single drug classes, and therefore all of the upcoming me-too drugs will gain certain share of this huge market, particularly with the novel ADA/EASD treatment guidelines which push for patient-tailored approaches.

 

The only first-in-class drug in late-stage development (in preparation for Phase III trials), Eli Lilly’s LY2409021 (glucagon receptor antagonist), will achieve great success. Until January 2014, there was an additional first-in-class drug in late-stage development, Takeda’s fasiglifam; however, the company terminated its trial due to concerns with liver safety, leaving the global type 2 diabetes Phase III pipeline completely void of any first-in-class molecules.  Therefore, Eli Lilly’s LY2409021 may be the only drug with a novel mechanism of action to reach the type 2 diabetes market within the next five years. This drug does not address the crucial issue of insulin resistance, but it employs a novel mechanism of action and could be used as an add-on therapy. LY2409021 will likely reach sales of over $1 billion by 2022. Another first-in-class drug in the late stage, Roche’s aleglitazar (dual PPARα/γ agonist), has also been retracted very recently from its Phase III trials, which will alter the future of the type 2 diabetes competitive landscape, leaving more room for other new entrants to gain market share.

 

The ultra-long-acting insulin analog, Eli Lilly’s insulin peglispro, will also reach sales of almost $1 billion in 2022. The drug’s clinical profile (long duration of action and efficacy in achieving weight loss) would typically enable it to become a big blockbuster drug; however, it will face stiff competition from another ultra-long-acting insulin analog, Novo Nordisk’s Tresiba, and also from the biosimilars of the currently established long-acting insulin analogs. 

 

These information are based on our recently published report: PharmaPoint: Type 2 Diabetes - Global Drug Forecast and Market Analysis to 2022 - Event-Driven Update