Business case US

The Novo Nordisk approach of operating its business along the Triple Bottom Line can be illustrated by the way the company is building its business in the United States. Novo Nordisk Inc. has been working for several years to grow its presence in the US, the world’s largest pharmaceutical market. It is doing so through a strategic approach that includes expanding the sales force, attracting and retaining talented people, gaining steady market penetration of its products, and working together with key stakeholders to make positive changes in the healthcare system that will benefit people with diabetes through the National Changing Diabetes Program. In 2005 Novo Nordisk achieved for the first time the largest insulin market share in the US by volume at 39%, edging out long-established and much larger competitors.

Diabetes is a growing problem worldwide and has increased dramatically in the US in recent years. Today there are 21 million Americans with diabetes, a third of whom do not even know they have the condition. Two thirds of all people with diabetes are not in acceptable control. Diabetes is linked to risk factors such as obesity - also increasing in the US - lack of exercise and an unhealthy diet. Type 2 diabetes, representing 95% of all cases and once considered an adult disease, is increasingly found in young people. Without significant lifestyle and behavioural changes, it is predicted that diabetes will continue to spiral upwards. The US Centers for Disease Control estimate that one in three children born in the US in 2000 will develop diabetes in their lifetime.

Diabetes is a complex disease that demands a high level of self-management and an individualised treatment approach not always possible for overwhelmed physicians and a healthcare system oriented towards acute rather than chronic care. When diabetes is not adequately controlled, it can lead to severe complications such as heart disease and stroke, blindness, kidney failure, foot complications, nerve damage and amputations. These lead to costly medical interventions and a dramatically reduced quality of life that could well have been avoided through better treatment at an earlier stage of the disease.

A report published in 2005 by Yale University Schools of Public Health and Medicine  with the Institute for Alternative Futures and sponsored by Novo Nordisk predicted that, if the system remains unchanged, by 2025 an estimated 50 million people (15% of the population) will develop diabetes, more than double the current number. It will also cost America 351 billion US dollars in direct medical and societal costs, more than double what is currently spent.

The US healthcare system is hard-pressed to address the problem of diabetes adequately. Some of the reasons are:

• Too few diabetes specialists (endocrincologists) to handle the growing number of cases
• Too little training in diabetes among primary care physicians who handle the majority of diabetes cases today
• Too little awareness of diagnosis and treatment of diabetes among the general public
• Too little awareness and focus among policymakers on the seriousness of diabetes as a national healthcare issue

”We need to get people to confront the fact that we have a system that is fundamentally unable to deal with diabetes as a chronic disease,” says Dr Francine Kaufman, Professor of Pediatrics at Keck School of Medicine and head of the diabetes programme at Children’s Hospital, Los Angeles. She is one of the stakeholders engaged in Novo Nordisk’s National Changing Diabetes Program.

Dr Kaufman has also noted with concern that the number of children with type 2 diabetes that she treats has risen from 4% to 25% in the last decade.

”What was once a disease of our grandparents we have watched march down in age until it has become a disease of our children,” she says.

The Novo Nordisk National Changing Diabetes Program is attempting to find solutions to these problems. Novo Nordisk Inc. will spend 50 million US dollars over the next five years to accomplish the following goals together with a wide variety of key stakeholders:

• Remove barriers to chronic disease management
• Create new incentives for better diabetes care
• Enhance medical training for diabetes chronic care
• Help people with diabetes manage their condition more effectively

”We want to be a catalyst for changing diabetes,” says Martin Soeters, president of Novo Nordisk in the US. ”We know that facilitating change in the healthcare system is an ambitious goal. That is why we try to engage as partners with one shared goal - the well-being and health outcomes of people with diabetes.

Here are some of the specific programmes and initiatives that are part of the National Changing Diabetes Program.

• Winning Diabetes Care in Medicare: Prior to 2004, Medicare, the government health assistance programme for people age 65 and older, lacked important prevention and screening for diabetes. Novo Nordisk and the wider diabetes community worked hard to change this. Today, new provisions in Medicare regulations allow doctors to screen patients for diabetes and heart disease based on risk factors, instead of waiting for symptoms to appear. Since enactment of the new law, Novo Nordisk has created and distributed educational materials about the new benefit to consumers, doctors and pharmacists, and continues to promote the new coverage working with other national healthcare organisations.
• Improving physician recognition: To recognise and reward high-equality, effective diabetes care, Novo Nordisk, along with the American Diabetes Association, is a supporter of the Diabetes Physician Recognition Program of the National Committee for Quality Assurance. The programme recognises thousands of phyiscinas for their leadership and dedication in providing a consistently high level of diabetes care.
• Focusing on best practice: In order to bridge the gap between current practice and best practice, the American College of Physicians (ACP), with support from Novo Nordisk, has developed a three-year educational initiative for patients, physicians and other health practitioners who treat diabetes. Through workshops, programmes and awards for quality improvements, the ACP Diabetes Initiative will raise clinicians’ awareness of the need to improve diabetes care, provide systems-based appraoches to implement necessary changes, and recognise those practices that do advance care, as demonstrated by improved patient outcomes.

• Increased field force: The company’s sales force has grown sixfold since 2001, to 1,200. In recognition that busy diabetes specialists have little time for pharmaceutical industry representatives, Novo Nordisk sales people use the time allowed to not only inform about the company’s products but also to discuss how the company can work together with physicians in efforts such as the National Changing Diabetes Program.
• Reimbursement of Novo Nordisk products: Today 80% of Americans can recieve reimbursement for Novo Nordisk insulin analogues from their health insurance plans or programmes.
• Creating a corporate culture around the Triple Bottom Line: Novo Nordisk in the US has created a ‘My Company’ culture among its more than 2,300 employees. The company culture is very important to the US affiliate, which has experienced an annual growth rate of 30% over a period of five years. Annual surveys of the working climate show that employees find highly motivating the company’s values, the access to top management, and the feeling of contributing to the company’s mission of helping people with diabetes and other serious health needs. The retention rate of top performers is significantly higher than for the industry. The company also earned recognition in 2005 when it was named the best place to work among large companies in New Jersey by NJBIZ Magazine and The Best Companies Group.
• Government Affairs office in Washington, DC: This advocacy office, established in 2005, works towards the company’s business goals of pricing and reimbursement of products, but also to raise awareness among policymakers of the need to make changes in the healthcare system to improve diabetes care.

While Martin Soeters is pleased with Novo Nordisk’s growth in the US, he says there is a lot more work ahead as the company faces growing competition. "The next goal is to obtain value leadership by continuing and accelerating the growth of the company’s insulin analogue portfolio. However, our ultimate goal is to get all people with diabetes in good control with a normal quality of life".

"The US represents 50% of the global sales of pharmaceutical products. There is no reason Novo Nordisk shouldn’t have that level of sales in the US. This will happen not just because of our products, but because of all the things we do to stand out as a different kind of company and, of course, because of our people,” he says.

This page has been assessed by PricewaterhouseCoopers as part of its assessment of Novo Nordisk’s statement that it reports ‘in accordance’ with GRI. Please refer to Audit and assurance for a full description of the nature of assurance offered.