The absurdly high cost of insulin, explained

Mar 11

Why Americans ration a drug discovered in the 1920s?

Insulin is one of the clearest examples of drug manufacturer price-gouging, and grassroots groups have done a really phenomenal job explaining the issue and outlining why insulin is a real problem. I feel like I am doing my part by writing you this blog to explain it as I understand it.

THE COSTS

Over the past decade, there has been a significant increase in the price of insulin in the U.S. The cost of the four most popular types of insulin has tripled over the past decade, and the out-of-pocket prescription costs patients now face have doubled.

Between 2003 and 2012 the price of insulin in the U.S.A tripled. Between 2012 and 2016, the average wholesale prices of three insulin types — rapid-acting, long-acting, and short-acting — have risen by 15% to 17% annually. Even having commercial insurance, it has still impacted people. During the same period, the average annual outlay for individual adults receiving 50% rebates on their insulin went up from $1,432 to $2,853, according to an analysis of employer-sponsored health insurance. Expenditures on glargine were the second largest of all Part D drugs that year, just after those for ledipasvir–sofosbuvir, an antiviral agent used to treat hepatitis C. That same year, Medicaid—the federal-funded and state-funded health insurance programme for people with a low income—spent more than $1·4 billion on glargine.

Why is this so outrageous? A 2018 study estimated that one vial of human insulin costs $2.28-$3.42 to produce, and one vial of analog insulin costs $3.69-$6.16 to produce. The study revealed that a year's supply of human insulin could cost $48-$71 per patient, and analog insulin could cost $78-$133 per patient per year.

Averaging all insulin types, the price per insulin unit in the U.S. is $98.70. Newer versions of insulin retail for between $175 and $300 a vial. Most patients with diabetes need two to three vials per month, and some can require more. MOST PEOPLE WHO USE INSULIN NEED 2-4 VIALS PER MONTH.

THE average price per month of insulin has rose to $450, but many people pay much more.

For the middle class worker paying full price for insurance on the Marketplace Obamacare plans. An insurance deductile around $7000 must be met before medicationsand that is in a monthly premium of approximately $550 for a 35 year old female like me, if I make over $25,000 per year of a net income. I was in this situation for two years at my diagnosis while in school 2016 to 2018.

“INSULIN IS OUR OXYGEN”

What is the average situation for a person with diabetes?

Of the approximately 34 million Americans who have diabetes (Types 1 and 2), about a third require insulin to manage their disease. One in four people with diabetes are now skimping on or skipping lifesaving doses. The actual cost of the after effects, such as the horrible diabetes complications, due to the cost-related insulin underuse if unknown. There are many documented stories of people with Type 1 diabetes (who depend on insulin for absolute survival) who have died because they could not afford insulin. (hyperlink to the below) Before insulin was invented, a person with Type 1 diabetes would only live weeks or months before dying. It was a life saving medication when inventor Frederick Banting discovered insulin in 1920. Banting was an altruistic man. , he refused to put his name on the patent. He felt it was unethical for a doctor to profit from a discovery that would save live so he refused to put his name on the patent and Banting’s co-inventors, James Collip and Charles Best, sold the insulin patent to the University of Toronto for a mere $1. claiming that the discovery belonged to the world, not to him. They wanted everyone who needed their medication to be able to afford it.

“Insulin does not belong to me, it belongs to the world.”

Today, Banting and his colleagues would be spinning in their graves: Their drug, which many of the 34 million Americans with diabetes rely on, has become the poster child for pharmaceutical price gouging.

Its Corporate Profiteering

The doctors and researchers who study insulin say it is yet another example — along with EpiPens and decades-old generic drugs — of companies raising the cost of their products because of the lax regulatory environment around drug pricing. “They are doing it because they can,

The number one claim by pharm companies is that is the cost of innovation.I do not find the “cost of innovation” argument very convincing. In his research, he’s come across many examples of the same insulin products that have been continuously available for years without improvements, yet their price tags have gone up at a much higher rate than inflation.

“The list price of these products are already out of reach for most Americans living with diabetes — in some cases, over $300 a vial,” he said. “It is also strange to see Humulin still priced at over $150 a vial considering this product was first sold in the US in 1982.”

When Humalog® hit the market in 1996, it sold for $21 a vial. Its current list price is $452 per vial. The cost of making insulin has not changed; even the drug manufacturers admit that. Yet, the price charged to consumers has increased 10 to 20-fold over the past couple of decades.

So what is the reaL STORY?

1. There is a virtual monopoly. The three main companies are Novo Nordisk, Eli Lilly and Sanofi. They make almost every insulin product

2.There are middlemen who exercise considerable control over market share and stand to gain from a high price Pharmacy Benefit Managers negotiate drug prices with drug companies and device manufacturers on behalf of health insurance companies. Basically, they are the middle-men between insurer and the manufacturer.Based on their negotiations with the manufacturers, the PBMs design “formularies” for the health insurance companies. This formulary is then used as a guide for insurance companies to cover one drug versus the other for patients. The drug companies created a 2-faced public / private system where they set two different prices for their insulin treatments: a publicly-reported, benchmark price (your list price) and a much lower price that they offer to the PBMs. To make a profit, the drug companies hike their publicly-reported benchmark prices, while maintaining the real prices they offer to PBMs.

2. there is the lobbying power of pharmaceutical companies and they make alliances with our politicians. The people we vote in to be our advocates get bought off. The vast amount of money spent by this powerful group of pharmaceuticals on lobbying and advertising has been able to prevent changes to the current system, specifically the solutions presented below. Many proposals to lower insulin costs as a result have unfortunately not been successful.

The truth is this... that insulin is much cheaper in the other countries where the government provides socialized medicine because the foreign government does not want to get ripped off. So it sets up regulations. In England, for example, the government has an agency that negotiates directly with pharmaceutical companies. The government sets a maximum price it will pay for a drug, and if companies don’t agree, they simply lose out on the entire market. This puts drugmakers at a disadvantage, driving down the price of drugs.

The US doesn’t do that. Instead, America has long taken a free market approach to pharmaceuticals.

How drug pricing’s simplest case study became a top issue since 2018

Insulin is one of the clearest examples of drug manufacturer price-gouging, and grassroots groups have done a really phenomenal job explaining the issue and outlining why insulin is a real problem.

Once the prices became so outrageous that people were dying. People started some grassroots efforts to fight back. They began to organize protests such as the following:

Blood-Money Protest at Eli Lilly, November 2019 — The Right Care Alliance organized and led this delivery of blood money to the Eli Lilly Innovation Center in Cambridge, MA on November 16, 2019. Parents and family of the deceased participated in pouring out blood in honor of their loved ones. Boston physicians declared an insulin crisis. Massachusetts citizens with diabetes shared how they are suffering and scared.

Gravestone delivery to Sanofi, March 2019 — A small group of patients, clinicians, activists, and people with with type 1 diabetes gathered at Sanofi pharmaceuticals to hold insulin manufacturers accountable for recent insulin rationing deaths. Activists brought wooden gravestones with the names and ages of six adults who died from insulin rationing. These gravestones became the backdrop for Right Care Alliance members with type 1 diabetes to tell their personal stories while honoring those who died because they could not afford the insulin they needed.

Ashes of the dead delivery to Sanofi, November 2018 — On November 16, 85+ patients, clinicians, students, and activists came to support the fight for lower insulin prices, along with more than five media crews to document the action. We marched and chanted to Sanofi headquarters, with the help of an activist marching band. Nicole Smith-Holt, James Holt Jr., and Antroinette Worsham, whose children died while rationing insulin, were at the head of the rally, hoping to send a message to the leadership of the Sanofi drug corporation by delivering the ashes of their loved ones.

Mother’s Day protest, May 2018 — For Mother’s Day 2018, we held rallies in Cambridge, Minneapolis, and Cincinatti with a total of more than 100 patients, clinicians, and activists in attendance. We also created virtual Mother’s Day cards with statements from the mothers of young adults who died from insulin rationing, calling on drug companies to lower the price of insulin. The cards gathered over 4,000 signatures online! We then printed 5-foot-high versions of the cards and delivered them to Sanofi pharmaceticals.

The most recent news was in July 2020 when Sen. Bernie Sanders joined a highly publicized “insulin caravan” seeking cheaper prices in Canada, he flooded the state of Michigan with television ads that picture him brandishing an insulin vial in outrage. Some are forced to head to Canada, where drug prices are more heavily regulated. Quinn Nystrom, a type 1 diabetic who organizes caravans out of Minnesota. A carton of insulin costs $20 - $40 instead of the $300 patients often pay in the US. A person can pay $1000 for 25 vials instead of $10,000. Of course, there isn’t enough insulin in all of Canada to make large-scale importation feasible. So now what is the US going to do.

WORLD-WIDE scale.

A study carried out by the Rand Corporation finds that individuals in the United States pay significantly more for insulin than residents of 32 other high income countries.

The U.S. price for insulin is 6.3 times higher than in Canada and 8.9 times higher than in the United Kingdom. U.S. insulin is also 5.9 times more expensive than in Japan and 27.7 times more expensive than in Turkey.

While discounts and rebates for insulin mean that individuals in the U.S. typically pay significantly less than manufacturers’ prices, they still pay more than others pay elsewhere.

Even if the U.S. manufacturers cut their price in half, people in the U.S. will still pay four times more than people in other countries.

However, the difference between U.S. prices and elsewhere varies according to the type of insulin. The most significant differences between prices in the U.S. and elsewhere were for analog and short-acting insulin.

How can this happen? The number 1 reason for the high cost of insulin is the presence of a vulnerable population that needs insulin to survive (Table 1). This population, which numbers in the millions, is willing to pay anything to have access to a lifesaving drug. The desperate need for a lifesaving product allows insulin to be priced at high levels because it is not a luxury item that one can forego. The manufacturers of insulin know that patients who need it will spend whatever it takes to acquire it, regardless of price. It is a matter of life and death.

IS HELP ON THE HORIZON?

There have been some efforts: Members of Congress have been pressuring drug companies and pharmacy benefit managers to bring insulin costs under control — but as I mentioned earilier. Most of those fall through and do not make it past lobbyists. There was a positive In May 2019 when Colorado took the unusual step of capping the price of insulin in the state: A new law says people with diabetes won’t have to shell out more than $100 per monthly copay for the drug, regardless of how much they use

Trump Administration has lowered out-of-pocket insulin costs for some. Trump also signed an executive order in July that would require federally qualified health centers to share the steep savings they receive through the 340B program with indigent patients, specifically for epinephrine and insulin products. He made a policy that was to start in t January 2021 thatMedicare beneficiaries will have more than 1,600 Medicare Advantage and Part D prescription drug plans to choose from that will provide a range of insulin products at a maximum of a $35 monthly co-payment. Biden quickly reversed both of those policies within the first few weeks that he was in office. There is no telling how many “corporate friends” he has after 47 years as a politician.

Nearly a year before COVID hit, there were a f3w initiatives carried out in the commercial sector to address insulin affordability. In 209, for example, the insurer Cigna and its pharmacy benefit management division Express Scripts announced a program designed to cap out-of-pocket costs for diabetic patients at $25 a month.

The insulin stepped up to the plate when COVID hit in April 2020. Lilly introduced their new Lilly Insulin Value Program on April 7, which allows anyone who has commercial insurance, or no insurance, to purchase their monthly prescription of Lilly insulin for $35.Novo Nordisk announced that people who have lost health insurance due to a change in employment status during COVID-19 may be eligible for Novo Nordisk’s Patient Assistance Program to receive free insulin for 90 days. But this was not very easy to access for main stream people. It is a difficult process that takes over a month to get.

The tragic deaths from insulin rationing

Jeremy Crawford, age 39, Dallas, TX (August 25, 2019) — After losing his job and insurance, Jeremy was struggling to afford the insulin he needed to survive. He tried using Walmart insulin but it didn’t work well for him. As he got sicker, he resisted calling 911 to get the help he needed because he could not afford it. He died from diabetic ketoacidosis.

Jesimya David Scherer, age 21, Minnesota (June 28, 2019) — In addition to managing his diabetes since he was age ten, Jesi worked two jobs to support himself, and was working on becoming an electrician. This year, however, it proved to be not enough, and he began rationing insulin, unable to fill prescriptions until the next payday. He was hospitalized in April with diabetic ketoacidosis. In June, two days after he’d last seen his family, he called in sick to work. He was found dead the following day.

Jada Renee Louis, age 24, Virginia (June 22, 2019) — A type 1 diabetic since age 7, Jada Louis found herself faced with a terrible choice this year – pay her rent or pay the $300 cost of insulin. After rationing landed her in the hospital for a week in June, she returned home in apparent good spirits. But a week later, she was dead. Jada, a lifelong lover of the performing arts, had a job at a local movie theater, but it was not enough to allow her to consistently afford her medications.

Josh Wilkerson, age 27, Virginia (June 14, 2019) — Josh and his fiancee, Rose Walters, both had type 1 diabetes. Josh managed a dog kennel, but was uninsured, and to help save for their wedding and new home, they decided to try using ReliOn, an older insulin they could purchase cheaply at Walmart. For Joshua, the insulin proved incompatible with his diabetes. During an overnight shift at the kennel, his blood sugar skyrocketed and he slipped into a coma, dying several days later.

Kayla Davis, age 28, Kentucky (June 5, 2019) — Kayla submitted a prescription for insulin to her pharmacy, but it could not be filled until her doctor’s office submitted the forms necessary to get it covered by Medicaid. She rationed the insulin she had left as she waited. Over the next week, she got sicker and sicker until she died from diabetic ketoacidosis. The approval for her insulin came though the next day.

Meaghan Carter, age 47, Ohio (December 25, 2018) — Meaghan Carter had type 1 diabetes for 18 years. When she lost her job and insurance, she struggled to afford her insulin which cost more than $800 a month. She resorted to buying NPH insulin (intermediate-acting insulin) from Walmart, which is cheaper but much more unpredictable than the insulin she normally used. On Christmas Day, 2018, Meaghan died of diabetic ketoacidosis, one day before she would have received a paycheck that could have saved her life.

Micah Fischer, age 26, Wisconsin (November 4, 2018) — Micah aged off his father’s insurance plan in June of 2018. His new insurance did not cover Humalog, the insulin that worked best for him and was recommended by his doctor. It would cost $1,200 out-of-pocket. Micah rationed his insulin and go without eating so that less insulin was needed. He was excited to start a new job in October with an insurance plan that covered the insulin he needed, but the plan had a one month waiting period. He only had two and a half weeks to go until his new insurance kicked in when he died.

Allen Rivas, age 20, Texas (May 11, 2018) — Allen received Supplemental Security Income (SSI) as a youth, but was denied this benefit once he became an adult. His brittle diabetes made it difficult for him to hold a job and his mother could no longer afford to keep him on her insurance. He rationed his insulin and and then turned to Walmart insulin when he couldn’t afford more. He died in front of his mother–two days before Mother’s Day.

Jesse Lutgen, age 32, Iowa (February 7, 2018) — Jesse was diagnosed with type 1 diabetes when he was 12. Jesse had no problems with his diabetes as a child, but as an adult, the high cost of insulin and supplies became his largest financial problem. When Jesse lost his job in November 2017, it became even harder to manage his diabetes. He had made too much money that year to qualify for Medicaid, and the cheapest insurance available had a $10,000 deductible. He decided to pay out of pocket for insulin, but resorted to rationing because the out-of-pocket cost was so high.

Alec Raeshawn Smith, age 26, Minnesota (June 27, 2017) — Alec Smith was diagnosed with type 1 diabetes at age 23. When he turned 26 he was no longer able to be covered under his parents’ health insurance. Alec made too much money to qualify for Medicaid, but his job did not provide insurance. The cheapest insurance plan had a $7,500 deductible, so he decided to go uninsured. He was paying $1,300 a month for insulin and supplies, almost half of his salary. He died on June 27, 2017 from diabetic ketoacidosis, less than one month after going off of his mother’s insurance.

Antavia Lee Worsham, age 22, Ohio (April 26, 2017) — Antavia struggled to afford insulin when she turned 18 and was no longer eligible for insurance coverage through the state. She had resorted to borrowing insulin from others, changing her diet, and rationing insulin because she couldn’t afford it. Her insulin and supplies cost $1,000 a month. Her brother found her dead from diabetic ketoacidosis on April 26, 2017.

Shane Patrick Boyle, age 48, Arkansas (March 18, 2017) — As a comic book writer, Shane had struggled to afford insulin, but received help from friends and his community in Houston. When he went to visit his dying mother in Arkansas, he had no way of buying insulin. In February 2017, Shane Patrick Boyle started a GoFundMe campaign to raise money for a month of insulin. He was $50 short of the amount he needed and died from diabetic ketoacidosis on March 18, 2017, a few days after his mother died.

Monique Gabriel Moses, age 26 (2017) — Monique lost her job and her insurance. She could not afford her insulin and would ration what she had to make it last longer. Her mother talks about her in this news story.

Why Americans ration a drug discovered in the 1920s? Learn all the loops in this blog.