Why Are Insulin Prices Still So High for U.S. Patients?

Why Are Insulin Prices Still So High for U.S. Patients?

Nearly a century ago, Dr. Frederick Banting discovered lifesaving insulin, but skyrocketing prices are putting the drug out of reach for many he sought to help.

The average price of insulin nearly tripled between 2002 and 2013 in the United States, according to an American Diabetes Association study. Yet other countries pay significantly less. In fact, Americans pay more than 10 times as much for insulin as Canadians do, according to a commentary published in the Nov. 7 issue of the New England Journal of Medicine.

"Insulin is a flashpoint in the drug-pricing debate, and it's still an ongoing issue. It's a relatively unique product that will require special solutions because so many people rely on it to ensure they can live day to day," said commentary co-author Dr. Aaron Kesselheim, a professor of medicine at Harvard Medical School.

The current costs would no doubt disappoint Canadian scientist Banting. In the 1920s he and his team members sold the patent for insulin to the University of Toronto for $1 each. They felt that insulin was such an important medication that it needed to be affordable, according to the NEJM commentary.

"Insulin does not belong to me, it belongs to the world," Banting once said.

Today, more than 7 million people in America use insulin. People with type 1 diabetes make little to no insulin, so they must replace the lost hormone through injections or via a tiny tube inserted under the skin and attached to a pump. People with type 2 diabetes still make insulin, but often not enough. Some people with type 2 diabetes also need to use insulin.

Manufacturers have upper hand

Kesselheim and colleague Dr. Michael Fralick wrote that there are two main reasons why insulin is so expensive now. One is that U.S. laws let pharmaceutical manufacturers set their own prices and raise them without limit.

The second reason, the authors noted, is that there isn't significant competition in the U.S. insulin market. Price competition typically comes from the introduction of a generic drug that directly competes with a branded product.

But the authors said that current insulin makers have blocked the entry to such products by getting new patents based on things such as a new delivery device.

Kesselheim also noted that "insulin is a slightly more complicated molecule," which makes developing a generic version more challenging.

He said that the makers of insulin have begun selling "authorized generics" of their brand-name products. Eli Lilly and Co. is selling a generic version of their branded insulin Humalog for 50% less than the brand-name product, according to Greg Kueterman, a company spokesperson.

Kueterman added that Eli Lilly doesn't currently have any patent-protected insulins. He said the company is also capping prices at the pharmacy for people with commercial health insurance, and increasing eligibility for free insulin for those with very low incomes.

Quinn Nystrom, 33, from Baxter, Minn., has type 1 diabetes. She's been working with local and federal elected officials to improve insulin access and affordability.

She's helped lead three bus trips to Canada so people could buy more affordable insulin. The same vial of insulin that she pays $340 for in the United States costs $30 in Canada, she said.

"A single vial of current analog insulin costs around $3 to $6 to make. There is no reason for that price difference between the U.S. and Canada, other than that Canada holds down their drug prices with legislation," Nystrom said.

But she doesn't see trips to Canada as a solution to the insulin pricing problem.

"These trips to Canada are like putting a Band-Aid on a gunshot wound," Nystrom said.

Nystrom has become so frustrated by inaction on the insulin pricing issue and the price of drugs in general that she's decided to run for U.S. Congress, and has pledged that she won't be taking any drug or insurance company money for her campaign.

She pointed out that insulin pricing affects everyone, diabetic or not. "If someone can't afford insulin, they end up rationing the insulin they have," Nystrom said. That leads to complications that send people to the hospital, which ends up costing far more than the insulin would have. "This affects everyone's pocketbook," she added.

Reform efforts in the works

Some politicians have introduced legislation to help contain the cost of insulin, with varying success. Officials in Colorado passed a bill that limits out-of-pocket copays to no more than $100 a month for insulin.

Several federal bills have also been introduced, including by presidential candidate Elizabeth Warren. "Warren's bill would develop a government manufacturing facility to provide lower-cost insulin," Kesselheim said.

Cigna, a large private insurer, has limited monthly copayments for insulin to $25.

Holly Campbell, a spokesperson for PhRMA, a pharmaceutical manufacturer trade association, said, "Dramatic improvements in how we treat diabetes have transformed the lives of patients, but this innovation isn't enough if patients can't afford their insulin and other medicines at the pharmacy."

She said that insulin prices after discounts and rebates have gone down in recent years, but that these negotiated savings aren't always directly shared with consumers. Campbell said incentives offered in the supply chain need to be changed so that those rebates and discounts lower prices for the consumer.

Sources: Aaron Kesselheim, M.D., J.D., M.P.H., professor, medicine, Harvard Medical School, director, Program on Regulation Therapeutics and Law (PORTAL), division of Pharmacoepidemiology and Pharmacoeconomics, Brigham and Women's Hospital, Boston; Quinn Nystrom, Baxter, Minn.; Holly Campbell, spokesperson, PhRMA, Washington, D.C.; Greg Kueterman, spokesperson, Eli Lilly and Co., Indianapolis, Ind.; Nov. 7, 2019, New England Journal of Medicine.

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