Skyrocketing insulin prices provoke new outrage

Rising insulin costs are drawing outrage from diabetes advocates, leading to calls for greater transparency and federal oversight of the market for a drug that helps more than 7 million Americans.

Insulin was first discovered nearly 100 years ago, and as newer forms of the drug have been introduced, the price has climbed.

Three companies — Eli Lilly, Sanofi and Novo Nordisk — control 99 percent of the world’s insulin, and advocates have been asking them to explain their pricing. According to the American Diabetes Association, the average price of insulin nearly tripled between 2002 and 2013.

{mosads}The price for a vial of one the most popular insulin brands, Humalog, increased from $21 in 1996, to $35 in 2001, to $234 in 2015, to $275 in 2017.  There are no generic forms of insulin on the market, but there are some cheaper “biosimilar” versions.

“Americans need Congress to take action to ensure a vibrant, competitive insulin market that serves consumers instead of drug company CEOs. Insulin is not a luxury. It is required for life,” said Ben Wakana, executive director of the advocacy group Patients for Affordable Drugs.

Insulin price spikes have also prompted scrutiny from members of both parties in Congress.

In the House, Reps. Diana DeGette (D-Colo.) and Tom Reed (R-N.Y.) have been conducting an inquiry into insulin pricing, with the intent of eventually unveiling legislation.

The Senate Aging Committee, chaired by Sen. Susan Collins (R-Maine), has also been examining the issue.  

The inquiries are ongoing, but lawmakers have run into a confusing and opaque system involving drug companies, insurers and pharmacy benefit managers (PBMs), the middlemen that negotiate discounts for insurers.

“While the prescription drug market, and the insulin market specifically, is opaque to virtually everyone involved, one fact is clear: the patients are not getting the best deal,” Collins said during a May hearing on insulin prices.

“No matter what recommendations are made by which entity, the bottom line is that Congress needs a comprehensive view of what’s causing insulin prices to skyrocket,” DeGette said in a statement provided to The Hill.

The American Medical Association (AMA), the country’s largest physician group, last week called for the federal government to protect patients from being harmed by companies price gouging on insulin products.

“It is shocking and unconscionable that our patients struggle to secure a basic medicine like insulin,” said AMA board member William McDade in a statement. “The federal government needs to step in and help make sure patients aren’t being exploited with exorbitant costs.”

The group wants the Federal Trade Commission and the Justice Department to monitor insulin pricing and market competition and take enforcement actions as appropriate.

In an interview, Gerald Harmon, a former president of the AMA, said he understands manufacturers need to make a profit, but he wants transparency in how they set their prices.

“We’ve asked for transparency … and haven’t really got it,” Harmon said. “We have asked Congress to require manufacturers, PBMs and insurance plans to uncloak their pricing mechanisms.”

Untangling the price is not easy and speaks to the larger issue of rising drug costs. Drugmakers say the list price of insulin isn’t what patients actually pay, because secret rebates negotiated by PBMs will reduce it.

PBMs say the drug company is ultimately responsible for setting the price.

Meanwhile, some insurers and employers are questioning whether the rebates they negotiated are really being passed on to them, while patients may find they don’t ever see their share of the costs reduced.

“We have a rebate system that’s driving up the cost of insulin,” said Cynthia Rice, senior vice president of advocacy and policy at JDRF, an organization funding Type 1 diabetes research.

Insurers say they spread the savings from discounts to lower overall premiums.

Rice said she wants Congress to pass legislation to encourage insurers to pass along rebates directly to customers at the point of sale, a policy that was recently adopted by both Aetna and UnitedHealth.

President Trump is taking aim at those rebates as part of his drug-pricing blueprint unveiled last month. He wants to require insurers to reduce retail prices to reflect the discounts they receive from manufacturers.  

The blueprint also suggests a fixed price for a drug, rather than a negotiated discount.

The AMA’s Harmon said Congress is in a better position to bring actual change to drug pricing mechanisms.

“Trump’s talking points are vague,” Harmon said.