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Martin Soeters (pronounced soo't rs) has dedicated a quarter century-almost half his life-to the company at which he's now president of US operations. Novo Nordisk, where Soeters has worked since 1980-in various executive roles and locations, from The Netherlands (his homeland) to Belgium to France-is a leader in diabetes treatment, with the largest portfolio in the industry.
Martin Soeters (pronounced soo't rs) has dedicated a quarter century—almost half his life—to the company at which he's now president of US operations. Novo Nordisk, where Soeters has worked since 1980—in various executive roles and locations, from The Netherlands (his homeland) to Belgium to France—is a leader in diabetes treatment, with the largest portfolio in the industry. That's not good enough for Soeters, though. He admires Americans, but remains unimpressed with what's been done thus far to control the diabetes epidemic in this country. He wants control in the United States to be what it is in Europe and Japan. The recipe? For starters, according to Soeters: better communication, more exercise, and evolved sales infrastructure at pharma companies. The Dutchman is leading the charge—one bike ride and piece of fruit at a time.
Soeters: As a foreigner, I have built-in admiration for Americans. But when you see how poorly diabetes is treated here, and what the consequences linked with that are, it doesn't match. Of the top-20 universities in the world, 17 of them are American. When you come here, you expect a sophisticated market. And in many areas it is sophisticated, but not in diabetes.
As a result of that poor control—and this is confirmed by the American Diabetes Association and the American Association of Clinical Endocrinologists—more than 200,000 people die every year from diabetes. And sometimes diabetes is diagnosed because of heart disease or a kidney failure. But all of that comes via late complications, as a result of poor control.
So 200,000 people, at least, die from diabetes every year, which means that one person dies every 20 minutes. In addition, more than 100,000 people get amputations, or become blind, or need kidney dialysis because of diabetes complications. So 300,000 people are affected directly, and then the whole environment around those 300,000 is indirectly affected. Not to mention, there are 44 million people who are obese. There is a high likelihood that a number of those people will become diabetic. The inflow of diabetes is going to be substantial. At the same time, if we look at the increase in doctors and specialized doctors, it doesn't match up with the growing patient population. This is going to create a big clash. In all of that, I think there is a mission. There is a challenge. There is an opportunity to do something about it.
Apart from the human drama, there is financial drama. We know that 10 percent of the healthcare budget—about $132 billion dollars annually—is spent on diabetes. Only 6.7 percent of that cost comes from drugs, so it is not the drugs that make diabetes treatment expensive. It is all the other things. In particular, it's the treatment of late complications, which apparently account for more than half of all the cost.
In the United States, the healthcare system is designed for acute care, not chronic care. Secondly, because of the extreme competitive environment between health plans and hospitals, there is not much sharing and communicating happening.
Now compare that with some European countries. There, if someone has a better practice, they stand on their hospital rooftop and shout it out to everyone. That's not necessarily the case here.
At Novo Nordisk, we basically want to be the catalyst in changing diabetes. We are not going to have the solution, but we want to try to bring together all the better practices in the United States and abroad, and make sure that they are disseminated and used across the nation.
My American colleagues tell me that I need to be careful in the way I express myself, when I say that we don't do a good job here. But if we don't confront people in a candid way about the status of poor control and the consequences, then nothing will change.
What specifically needs to change, and how is Novo Nordisk getting involved in making sure those changes take place?
We have a long history—80 years—with diabetes. We have our own hospital; we have our own basic research. If you look at our pipeline, it's very focused on diabetes—more than 70 percent of our business is in that area.
We have tried to make a plan—we call it the National Changing Diabetes Program. We're going to roll that out to all the different associations in Washington, DC. With the program, we are highlighting all the better practices and all the activities that should be done in the area of prevention and cure.
In the area of prevention, we're working together with the President's Council and the Endocrinology Association to prevent childhood obesity. We created awareness campaigns in schools, with doctors. Our sales force goes into schools with the doctors and they talk about the prevention of childhood obesity.
Separately, we created a new Washington, D.C. office—a lobbying office—with four individuals, headed up by the chief lobbyist from the American Diabetes Association. His only task is to get diabetes high on the political agenda. A lot of doctors don't do enough educating of patients about diabetes because they cannot get it reimbursed or they cannot make enough time; they'd rather let diabetes educators handle it.
We're also working on making physical exercise mandatory in schools again. I come to the office at least once a week by bike. When I show up, the employees look at me like I'm weird. But it's important to show by example. That's something we also do with food. We used to have big cakes and other fatty foods at meetings. Now we have replaced that with fruit. If we offer meeting attendees food, we offer them something healthy.
That's the prevention piece. On the cure part, we work closely with the Juvenile Diabetes Research Foundation and with NIH. We have given unrestricted educational grants to educate family-physician residents about diabetes. So now all family-physician residents have to go to a mandatory program on diabetes, sponsored by us. Same thing for all the endocrinology and specialist fellows: They get a program on diabetes.
We also have a similar program at the American College of Physicians. We have an agreement with the Entertainment Industry Foundation, a film industry association, to do awareness programs. Nancy Reagan, Harrison Ford, and Dustin Hoffman have all participated. The entertainment industry is mobilizing itself to speak. That is helping with the awareness.
So we're doing a lot of things. Since we have such a long history, we have the commitment, we have the competencies in-house—both international and domestically. Our ambition is to be recognized for that social responsibility, to be perceived as different from what other pharmaceutical companies are doing. As a result of that, I believe Novo Nordisk will be better perceived by the doctors. That will lead to our sales people getting more time from the doctors. Doctors will see our reps more often and longer, which will allow reps to put our products in the right perspective.
One theory is that with the diabetes market, because there's so much available that is low-cost and can be effective, it's more important than in some other fields to come in with an innovative product if you want to sustain your business. In other words, because there are numerous alternatives available to patients, when you come in with a new drug—especially one that's going to cost more to the patient—it had better be innovative because there's plenty out there already. Do you agree with that?
That is true. We have several products that focus on the beta cell, and some that focus on the insulin receptor. There are many of them on the market and there will be more coming. With insulin, we have short-acting insulin analogs and long-acting analogs; we also have mixture analogs. We are the only company that has all three. With those three different analogs, we should be able to treat everyone well.
But as I said, the doctor has to be committed—and well-educated—with the infrastructure around him to do the right job. And patients have to be aware, first. Secondly, they have to be motivated, they have to be empowered, and they have to be compliant with the treatment. We have the right products. It's just getting the process right.
In some fields, if a patient's falling behind on treatment, you say, "Well the trouble is we don't have the right kind of drugs to treat these patients." With diabetes, we already have both the drugs and the delivery systems to do a very good job with most patients. And yet we don't. So it's not a failure of the drugs, it's a failure of the system.
Yes. If you look at the fact that only 6.7 percent of the total treatment costs come from drugs, it cannot be blamed on that. Let's assume we doubled the price of the drugs, to something like 12 or 13 percent. We won't do that, but it makes the point that the cost of the drug is kind of irrelevant in the whole thing. It is the system, the infrastructure, that is the problem.
Given all the companies out there with diabetes drugs, is it enough to change the way physicians actually think about and treat patients?
I think that if you believe in something, then there is a high likelihood that you will succeed. And we have been able to do major initiatives in other countries where we really have changed the culture and have created an environment that's very positive, that's drawn a lot of attention to diabetes.
Can you give an example?
In Europe, and also in Japan, our company has been very instrumental in getting diabetes well-controlled. In Europe, if you take my home country, The Netherlands, we have 91 percent of the insulin market share. In Japan, we have about 80 percent. There, again, we have not just been selling the product. We want to make sure that people with diabetes are well-controlled. That creates not only customer satisfaction, but also customer loyalty, where our customers are our advocates. They talk about us in a very positive way. If you took a sample of endocrinologists, they would all tell you that we are a very decent company and that we do our jobs in a very responsible way. That's the way we want to be recognized.
If all you have to do is sell insulin, it is difficult to keep being engaged and motivated. But we have so many examples of patients that improve and live normal lives with diabetes. If you combine that with selling a product, then suddenly you have job satisfaction. That attracts people to our company. When people join Novo Nordisk, they usually stay with us. We have many people with high seniority. And even though we are growing, every month I have a huge breakfast with about 500 employees to tell them about what's going on. Once a quarter, we ask our sales reps to sign into those meetings via webcam. Once a month, I hold a birthday lunch for all employees with birthdays in that month.
I ask for feedback—What should we be doing better as a company? What should we do with our customers, doctors, and patients? They give me direct feedback, and I make note of it. We take their feedback very seriously, and that creates engagement in the company. When your employees are happy with their jobs, you can do things well for people with diabetes. You are successful from a business perspective.
What do payers think of what you're doing?
Eighty-five percent of our products are reimbursed. Financially, we have a good relationship. Payers clearly see the interest, even though five years ago they thought, "Why would I invest in diabetes?" That attitude has changed drastically.
First of all, there is competition—strong competition—between the health plans. There is an awareness that increased treatment and quality of control will make costs go down. And there also is a realization that if you have 20-percent turnover, then after five years, you get the same patients back again, the most expensive patients. So we're seeing a much nicer reaction to people with diabetes. It's still not sold, but there's a clear change in attitude about the importance of good control and how to accomplish good control with people with diabetes. I think the health plans are much more in favor.
And I also see an increased interest on the part of employers. They also see an interest in improving diabetes control because they see that the normal productivity of those individuals, when they are well-controlled, is good for the economy. If a person with diabetes stays in the labor process and pays taxes, that's better than if they depend on social security. That's good for all of us. It's a win-win for everyone.
Speaking of win-wins, you are an advocate for linking sales-representative compensation with patient outcomes. How close are you to being able to do something like that?
That vision is for a few years down the road. At this point in time, we clearly don't have the data, although there are more and more regional data becoming available. We are first trying to get the national data more validated—that is the first step. Getting everyone hooked up and getting electronic medical records has to be done. That's one of our activities that we would like to get attention for in Washington, DC.
In France, when the government offered the whole medical profession special tax incentives to hook up electronic medical records, you saw an extreme, fast takeoff. Once we have established electronic medical records, we should be able to get regional and territory data.
I think we should put money on the table for our reps when they are successful in terms of market share. But that should not be the only objective they look at. Fifty percent of their focus should be on financial accomplishments, and the other 50 percent on accomplishing an improvement in glycemia and diabetes control.
If you can get to the point where your compensation plan is not based on prescription volume but on a combination of share and patient outcome, it becomes very transparent and very inoffensive to the government, to people, and to doctors.
Exactly. Everyone will see that as a very positive signal. The pharmaceutical industry has been doing many great things as an industry, but we have not been able to communicate our accomplishments to society.
What does Novo Nordisk have going on in areas other than diabetes?
We are becoming more and more active in the area of hemostasis. That started because a Swedish professor who joined our company brought in a recombinant factor VIIa, which is given to hemophilia patients with inhibitors. That was a real breakthrough. And even though it's for a small patient population, it is still very important.
Plus, we're looking at the potential for other indications. We called together a number of global experts in the area of hemostasis to help us decide what indications the drug should be targeted to. They said that the drug had potential for 45 indications. We thought we should bring it back and try to prioritize. We brought it down to 24 indications, and we are in close discussions with FDA about two of them. One is for trauma—car accidents and bullet wounds. We also heard that doctors in the army are already using it, in Iraq, when soldiers are bleeding in battle. We are going to start a Phase III study, which could lead to approval for that specific indication.
The second indication that's close to reality is for stroke, in the cerebral hemorrhage, for which there is currently no good alternative. The New England Journal of Medicine reported that the product has extraordinary results. From the published study, it looks almost too good to be true how many people's lives were saved or improved.
In the United States, we are going to do a large Phase III trial to also get the stroke indication approved. We are doing many activities for hemostasis that we have learned from in diabetes, and which the diabetes community probably appreciates.
What's does the future of diabetes treatment look like?
We're working on oral insulin, but the unpredictable absorption from the intestines and the stomach does not lead to a very stable glucose level. With diabetes, it's important that you have a low glucose level, but that low average glucose level is not the only factor. You also don't want to have the variations in ups and downs. And that's the reason why we have short-acting analogs and mixed analogs—you want to prevent and avoid the peaks around meals.
We also are working on self-thinking insulin, which acts when there is high glucose concentration, as soon as it enters the blood stream. That's called insulin mimetics. It's intelligent formulation of insulin.
Our oral compounds that are close to the market are DPP4, new insulin sensitizers, and the glucose kinase activator, which involves a different mechanism for Type II diabetes. We also are coming out with a human GLP1 glucose-like peptide. We are doing late-phase trials in humans.
We acquired California-based Aradigm, now Novo Nordisk Device Technology, at the end of last year. They will be working on a pulmonary insulin product in liquid form for us. We are in late Phase II with that product, but of course you always keep having the concern about what will happen from giving pulmonary insulin for 30 years.
And the two pulmonary insulin products that are further along in development than yours are in powder form?
Yes. But we think that a lot of elderly diabetics, who don't dare take insulin injections, might be well-suited for pulmonary administration. But we all are struggling with the bioavailability. What will it mean if you have pulmonary insulin for 30, 40, or 50 years?
We know what it means to be a diabetic who has been getting 50 years of regular insulin—the Jocelyn Clinic gives medals for living with diabetes for 50 years. But we don't know what it means to get 50 years of insulin via the lungs.
Do you find that having the foundation structure makes it easier to do things like allocate research dollars to finding a cure rather than finding the next treatment?
We have a special unit, Hagadone Research, that is completely different and separate from the rest of Novo Nordisk. They have nothing to do with product research. Those folks only do basic research, and they have their own budget every year. On top of that, they get grants from the Juvenile Diabetes Research Foundation and from NIH.
It's not usually the case that companies have basic researchers looking—independently—at cure and prevention.
Are stem-cell approaches coming soon?
We believe that there are at least one or two—perhaps three—promising routes for using stem cells for treating diabetes. But five years ago, we thought gene therapy was between five and 10 years away. And today, we're still hearing the same thing. So to be honest, I cannot say how fast that will come. But at least it is a promising route, and we should do whatever we can to look into it.
Do you want to sink any money into a virus-based delivery of the stem cell?
I cannot evaluate that well enough. But as I said, we think it is at least a promising route. We are working heavily on the prevention and cure. And if there is some direction setting and there are small steps, then there is hope. And hope is important to all of us. As long as there is hope, I think there is a willingness to live and to enjoy our current life. And that, I think people with diabetes deserve.
Soeters was named to his current post of president, Novo Nordisk USA, in 2000. Before that, he was senior vice president of international marketing, a position he held for two years. Dutch by birth, Soeters joined the company overseas, and has held various executive positions in The Netherlands, Holland, Belgium, and France. He's been with Novo Nordisk since 1980.