The launch of MannKind’s inhaled insulin Afrezza fell far short of expectations, bringing in about $1.1 million in its first seven weeks on the market, despite analyst predictions of a blockbuster.

Sanofi, MannKind’s commercial partner for the drug, attributed the lower-than-expected sales to the FDA’s requirement that patients undergo lung tests before starting treatment and while using the therapy as well as the broader need to raise awareness about the product. The drugmaker plans to launch a DTC campaign this summer. “It will take time for Afrezza to demonstrate its potential,” a Sanofi spokeswoman said.

But experts say the increasingly competitive nature of the US insulin market, especially when it relates to pricing, and the trend toward more stringent insurance reimbursement may have more to do with the slow adoption of Afrezza than a lack of awareness among diabetes patients and endocrinologists.

“It’s more difficult for companies in general to make a significant impact in the marketplace without going forward to physicians and insurers with some sort of clear efficacy improvement and/or really substantial safety improvement,” said Nathan Dowden, managing director of life sciences at Huron Consulting Group.

Whether drugmakers can demonstrate the value of new products is now a primary factor for adoption and coverage of new medical products, both in the insulin market as well as with most new drugs and devices. Payers and healthcare providers want to know if a product can reduce trips to the hospital or lower overall medical costs. For example, if Afrezza’s delivery mechanism—a patient inhales the drug instead of having to prick his or her finger—can boost adherence and deter visits to the emergency room, insurers and PBMs may be willing to give the therapy preferred formulary status. But without that kind of data, adoption may remain limited to certain patients.

“Unless Afrezza can demonstrate outcomes advantages, I’m not sure that payers will see much benefit to it,” said Roger Longman, CEO of pharmaceutical analytics reimbursement firm Real Endpoints.

Afrezza, a meal-time insulin, is considered an option for patients who are resistant to using needles to inject insulin or may be hesitant to beginning treatment.

Dr. Farhad Zangeneh, a endocrinologist who practices in Sterling, Va., recently switched one patient with a fear of needles to Afrezza. He says every practice has one or two patients with similar fears. “Would I call this Lorenzo’s oil? No,” he said. “But it does have an application.”

Still, the dynamics of the market for an inhaled insulin product have changed considerably since MannKind first began developing Afrezza in the early 2000s. The needles and pens used to inject insulin have become much more advanced and less painful over the last decade, a development that has helped more diabetes patients accept a daily prick.

The market has also seen one inhaled product fail. Pfizer’s Exubera, which received FDA approval in 2006, was dropped from the market a year later due to low sales caused by a number of factors, including concerns about lung-cancer risks, complaints about the size of the device and high prices. As a result, Pfizer reported a $2.8-billion pretax loss for the drug’s failure in the marketplace. Eli Lilly and Novo Nordisk, both leaders in the diabetes market, later halted plans to pursue development of inhaled insulin products.

“Therefore, many critical diabetologists raise the provocative question: Is Exubera an innovation or is it just a needless toy?” a researcher wrote in 2008 in the Journal of Diabetes Science and Technology.

That question may persist. Goldman Sachs in March halved its 2025 sales forecast for Afrezza to $1 billion. Edison Investment Research Analyst Maxim Jacobs called the drug’s first-quarter performance “terribly disappointing considering the size of the market.” The estimated US market for insulin products is about $17 billion.

“This does not bode well for MannKind’s future prospects given their extremely high expense level of $200 million per year,” Jacobs wrote in an April 30 investor note.

Payers remain skeptical about the benefits of the therapy. The majority of health plans that cover Afrezza have the drug listed with Tier 3 restrictions, which require a higher co-pay for the patient than Tier 1 and 2 treatments. About one-fifth of insurers do not provide any reimbursement for Afrezza, Sanofi said.

A spokeswoman for Anthem, one of the nation’s largest insurers, said there are other meal-time insulin options for diabetes patients that do not carry a black box warning and have fewer side effects. Anthem does not cover the drug for patients covered by a health  exchange plan or Medicare Part D although those members can file for an exception.

Sanofi’s pricing strategy is another factor—other meal-time insulin choices such as Novo’s Novolog and Lilly’s Humalog are priced similarly. The wholesale acquisition price for Afrezza ranges between $211 and $260 for a 28-day supply. But some analysts have said Sanofi is likely discounting the treatment as it seeks to establish the product in the market.

More manufacturers are discounting insulin and providing higher rebates in order to keep their drugs on formularies, which can make it more difficult for pharma companies to launch new drugs that aim to replace the highly discounted older products, according to Real Endpoints’ Longman. “It’s a very challenging sale,” he said.