Best possible pricing
Novo Nordisk offers human insulin to the public health systems in the Least Developed Countries (LDCs), as defined by the United Nations, at prices not exceeding 20% of the average price in North America, Europe and Japan.
For 2008, Novo Nordisk offered its best possible pricing scheme, as part of the global health initiatives, to all 50 Least Developed Countries (LDCs) as defined by the United Nations. During 2008 Novo Nordisk sold insulin to either governments or to the private market in a total of 32 of the LDCs (see map) at or below a price of 20% of the average prices for insulin in the western world, compared to 36 in 2007.
In 14 countries Novo Nordisk is not selling insulin at all, for various reasons. The four LDC countries in which Novo Nordisk does not sell insulin at the policy price are Afghanistan, Cambodia, Nepal and Samoa. The public authorities in all countries have been offered the opportunity to buy insulin at the policy price. The insulin sold in Afghanistan, Cambodia and Nepal in 2008 is to the private market. In several cases, the government has not responded to the offer, there are no private wholesalers or other partners with whom to work, or wars or political unrest sometimes make it impossible to do business.
While Novo Nordisk prefers to sell insulin at the preferential price through government tenders, the company is willing to sell to private distributors and agents. The target is to offer the best possible pricing scheme to the governments of all LDCs. Unfortunately, there is no way to guarantee that the price at which Novo Nordisk sells the insulin will be reflected in the final price on the pharmacist’s shelf. Wholesalers and pharmacies may mark up the drug before selling it to the consumer.
During the past five years, Novo Nordisk has identified several barriers to accessing insulin at the preferential price and has decided to take appropriate measures to tackle these challenges. We launched pilot projects during 2008 in five different countries: Cameroon, the Democratic Republic of Congo, Guinea-Conakry, Mozambique and Tanzania. The five countries were chosen as the situation in each country varies, thereby requiring different approaches. Novo Nordisk is working with Ministries of Health and relevant business partners in the countries to influence the distribution process so that the preferential price benefits people with diabetes. Based on the outcome of the pilots, these measures will be applied in other LDC countries.
In 2008, the company launched pilot projects in six countries to ensure that people with diabetes actually benefit from preferential pricing. These measures include reducing insulin prices on the private market, initiating discussions with local agents to reduce mark-ups, and working with governments to centralise insulin procurement.