Emerging markets for type 2 diabetes pharmaceuticals are expected to grow in tandem with a dramatic increase in the prevalence and diagnosis of the disease in China, India and Brazil, according to a new report by GlobalData. Greater life expectancy and lifestyle changes as a result of rapid economic growth in these countries are blamed for the increased prevalence of diabetes 2, which is expected to continue throughout the forecast period up to 2022. Sales are also expected to grow steadily in the established markets in France, Germany, Italy, Japan, Spain, the UK and the US.

The report focuses on type 2 diabetes pharmaceuticals in these seven major and three emerging markets, which together are referred to as ‘the global market’. The global type 2 diabetes pharmaceutical market in the 2012 base year was $28.1 billion, including branded and generic drugs. Branded products alone accounted for $19.2 billion across the ten markets.

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

"AstraZeneca will be the fastest-growing company in the type 2 diabetes space and may even become the second largest with its two potential blockbusters."

Over the forecast period, 2012-2022, emerging markets will grow in size most rapidly, while uptake of branded drugs is also expected to increase thanks to the fast growth of the middle classes. Sales in the US will grow by about 9% a year over the period. The European and Japanese markets will increase steadily; however, cost constraints in Europe and the slow regulatory process in Japan will slightly limit growth in these regions.

Shift towards competitive pricing

Leading companies occupying the type 2 diabetes space include Bristol-Myers Squibb, Eli Lilly, GlaxoSmithKline (GSK), Merck, Novartis, Novo Nordisk, Sanofi and Takeda, while AstraZeneca and Boehringer Ingelheim have recently entered this market through the formation of partnerships.

With the loss of market exclusivity for Actos and Avandia respectively, GSK and Takeda faced a patent cliff in 2012. Due to adverse effects, Avandia’s patient share dropped sharply even before its patent expired. Takeda is compensating for Actos’s loss of patent protection by strengthening its diabetes portfolio through partnerships, as well as by developing some novel, first-in-class molecules.

In 2013 and 2014, Novo Nordisk, Sanofi and Eli Lilly have all faced or are facing patent expiry for their respective blockbuster insulin analogues NovoLog, Lantus and Humalog, and will suffer erosion to biosimilars from around 2015, when presumably all the regulations for biosimilar insulin production will be in place.

Over the forecast period, Novo Nordisk is expected to remain the market leader in the overall type 2 diabetes market, and particularly in the insulin market, with several insulin analogues marketed or in development, and a current blockbuster in the GLP-1 class, Victoza.

AstraZeneca will be the fastest-growing company in the type 2 diabetes space and may even become the second largest 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 capitalising 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, and some companies have started focusing on price rather than on therapeutic value. Sanofi’s recently marketed Lyxumia was launched at a heavy discount compared with its rival GLP-1 agonists, Bristol-Myers Squibb’s Byetta and Novo Nordisk’s Victoza. Lyxumia is the fourth-to-market product with low-level differentiation in the GLP-1 space, and thus Sanofi had to offer a competitive price in order to win market share.

Given today’s cost pressures, it is likely that other companies will adopt this strategy with their me-too drugs 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 individualised solutions for patients.

Opportunities for market access

All currently available treatments for type 2 diabetes are initially effective and reduce complication rates, but they lack the ability to maintain glycaemic control in the long term because of the progressive nature of pancreatic beta-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 so for the foreseeable future. Therefore, this market offers a significant growth opportunity for new patent-protected products.

"Over the next ten years, the long-acting GLP-1 receptor agonist therapies will increase the most, because the companies will be developing once-a-week treatments."

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 sensitisers such as TZDs.

Drug development

During the ten-year forecast period, GlobalData anticipates 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 (a CAGR of 13.4%), due to their weight-loss effects and their 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 Bristol-Myers Squibb’s currently marketed Bydureon, but they have a somewhat better clinical profile in terms of convenience. As albiglutide will reach the market first, 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-3102 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 $591 million by 2022.

One unusual feature of the type 2 diabetes market is its ability to support multiple growth drivers in single drug classes. As a result, all of the upcoming me-too drugs will gain certain share of this huge market, particularly with the novel ADA/EASD treatment guidelines that 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, likely reaching sales of over $1 billion by 2022. Until January 2014, there was an additional first-in-class drug in late-stage development: Takeda’s fasiglifam; however, the company terminated its trial because of concerns over liver safety, leaving the global type 2 diabetes phase III pipeline 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 could be used as an add-on therapy.

Another first-in-class drug in the late stage, Roche’s aleglitazar (dual-PPAR alpha/gamma agonist), has also been retracted 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.

Eli Lilly’s insulin peglispro, the ultra-long-acting insulin analogue, will reach sales of almost $1 billion in 2022. The drug’s clinical profile (long-lasting action and efficacy in achieving weight loss) would typically enable it to become a big blockbuster drug. However, it will likely face stiff competition from another ultra-long-acting insulin analogue, Novo Nordisk’s Tresiba, as well as from the already-established biosimilars.

"Over the next ten years, the long-acting GLP-1 receptor agonist therapies will increase the most, because the companies will be developing once-a-week treatments," said a physician and key opinion leader who spoke to GlobalData. "Longer-acting preparations, if they are proved to be effective and safe, will be used more and more because they really do have a benefit in weight loss."